There are three subsidy schemes available for Education Loan which is detailed below:

1. Central Scheme to provide Interest Subsidy to Educational Loan (CSIS)

• The scheme is applicable for “Study in India” only.
• If a course is pursued partly in India and partly abroad, the same is not eligible for subsidy.
• The Scheme is applicable for pursuing any of the approved courses of studies in technical and professional streams from recognized Institutions in India.
• As per the scheme, annual gross parental / family income from all sources should not be above Rs.4.50 lakh. Income proof should be obtained from designated authorities approved by respective State Government / U.T. for this purpose (e.g. for Tamil Nadu from Zonal Deputy Tahsildar) and to be submitted to the lending branch.
• The income of the family as on the date of educational loan application shall be taken for arriving eligibility. Subsequent increase or decrease in income will have no effect on the eligibility.
• Interest Subsidy is available towards the amount of interest charged for educational loans for limit up to Rs.10.00 lakh. If an educational loan is sanctioned for more than Rs.10.00 lakh, interest subsidy will be available for the interest charged for the limit up to Rs.10.00 lakh only.
• No collateral security or 3rd party guarantee is required for loans sanctioned up to Rs.7.50 lakhs. However, this part of the loan should be eligible to be covered for guarantee under Credit Guarantee Fund scheme for Education Loan (CGFSEL).
• The interest subsidy is available up to the moratorium period.
• The interest charged up to the moratorium period will be borne by Government of India. After the moratorium period is over, the interest on the outstanding loan amount shall be paid by the student in accordance with the existing Educational Loan Scheme as may be amended from time to time. The candidate will bear the Principal instalment and interest beyond moratorium period.
• The Interest subsidy is available only once either for the first undergraduate degree course or the post graduate degrees / diplomas in India.
• Admissions for the courses secured under Management Quota are not eligible.

2. PADHOPARDESH SUBSIDY

• The Interest subsidy is available for educational loans sanctioned to students of minority community upto the moratorium period (course period + holiday period) for the educational loans sanctioned to pursue Masters/ M.Phil/ Ph.D. courses abroad.
• Annual family/parental income shall not be more than Rs.6.00 lakh currently (which may be revised from time to time) are eligible under the scheme.
• Income certificate should be submitted from the notified authority in the State/Union territory.
• Interest Subsidy is available towards the amount of interest charged for educational loans for limit up to Rs.20.00 lakh. If an educational loan is sanctioned for more than Rs.20.00 lakh, interest subsidy will be available for the interest charged for the limit up to Rs.20.00 lakh only.
• The benefit of 1 % interest reduction in the interest rate offered by Banks in normal course on Pre-payment of interest during the moratorium period shall be passed on to the students.
• The students obtaining benefits under this Scheme shall not be given the interest subsidy if he gives up Indian citizenship during the tenure of the loan.
• The interest charged up to the moratorium period will be borne by Government of India. After the moratorium period is over, the interest on the outstanding loan amount shall be paid by the student in accordance with the existing Educational Loan Scheme as may be amended from time to time. The candidate will bear the Principal instalment and interest beyond moratorium period.
• Students should apply for the benefits under the scheme during 1st year itself of the course. Fresh applications received during 2nd year or subsequent years will not be accepted in any case.

The scheme stands discontinue from 2022-23 as informed by IBA. However, the existing beneficiaries as on 31.03.2022 will continue to receive the interest subsidy during the moratorium period of the loan, subject to compliance with the extant guidelines.

3. ACSISOBCEBC SUBSIDY

• The scheme is applicable for educational loans for higher studies abroad sanctioned under IBA scheme only.
• The interest subsidy under the scheme shall be available to the eligible students only once, either for Masters or Ph.D levels. Interest subsidy shall not be available to those students who either discontinued the course mid-stream due to any reason, or those who are expelled from the institutions on disciplinary or academic grounds.
• Interest charged for the educational loans during the moratorium period (course period + holiday period) is provided as subsidy. The candidate will pay the Principal installments as well as interest beyond moratorium period.
• If the educational loan is sanctioned for more than Rs.20.00 lakh, the eligible loan component is reckoned as Rs.20.00 lakh only for the purpose of interest subsidy claim.
• The scheme is applicable for courses leading to Masters (including PG Diploma), M.Phil and Ph.D courses only.
• If the course pursued by the student is partly in India and partly abroad, the course will be eligible for interest subsidy, if the Degree is awarded by Foreign University
• The scheme is envisaged to provide interest subsidy to two target groups; OBCs and EBCs.
• The income ceiling for OBCs is Rs.8.00 lakh p.a., and for EBCs Rs.5.00 lakh p.a. currently which may be revised from time to time.
• The income certificates provided by appropriate authority designated by State Government/ITR forms/Form 16/Audited accounts are acceptable to determine the income ceiling. Income certificate submitted during loan application shall be treated as proof of annual income. Subsequent increase /decrease will have no effect on the eligibility.
• For the scheme for OBCs, those who are included in the Central List of OBCs are only eligible (the respective state lists shall not be followed). The OBC certificate in the prescribed proforma issued by the competent authority has to be obtained.
• The students obtaining benefits under this scheme shall not be given the interest subsidy, if he gives up Indian citizenship during the tenure of the loan.