What are The Types of Education Loan Interest Subsidy Schemes?
Many students find it difficult to meet the rising costs when it comes to higher education. Though education loans have made it possible for students to realise their higher education dreams, loan repayment remains a headache.
For the benefit of students, the Government of India has introduced many education loan interest subsidy schemes like Padho Pardesh Scheme.
Types of Education Loan Interest Subsidy Schemes
Introduced by the Government of India, the following education loan interest subsidy schemes focus majorly on economically backward students.
Padho Pardesh Scheme: This scheme is provided by the Ministry of Minority Affairs, Government of India. Under this scheme, interest subsidies are awarded to deserving students belonging to notified minority communities to pursue higher education abroad and boost their employability. The Government will bear the interest payable by the students during the moratorium.
Eligibility criteria
The eligibility criteria for availing the Padho Pardesh loan are as follows.
- The student should have secured admission in approved Postgraduate/MPhil/PhD courses abroad.
- The student needs to avail loan from a bank scheduled under the Indian Banks Association. This includes all important public sector banks and a few private banks.
- Students need to apply for this interest subsidy scheme within the first year of the course. No application would be accepted in the second year.
- Family income should not exceed Rs.6 LPA.
Dr Ambedkar Central Sector Scheme : Provided by the Ministry of Social Justice and Empowerment, Government of India, this scheme is similar to the Padho Pardesh education loan. It provides interest subsidies on education loans for Other Backward Classes (OBCs) and Economically Backward Classes (EBCs).
Eligibility criteria
The qualifying criteria are as follows.
- Education loan has to be availed from a member bank of Indian Banks Association only. In addition, students need to have secured admission to any Masters/Mphil/PhD courses abroad.
- OBC Certificate issued by competent authority has to be submitted.
- Two members of the same family cannot avail an interest subsidy under the same scheme.
- Family income cannot exceed Rs.8 LPA for OBC category and Rs.2.5 LPA.
- Central Sector Interest Subsidy Scheme
Provided by the Ministry of Human Resource Development, Government of India, the CSIS scheme is for students who wish to pursue their higher education in India only. The Government bears the interest during the moratorium period.
Eligibility criteria
The eligibility criteria are as follows.
- This subsidy scheme is only for professional and technical courses from NAAC and NBA accredited institutions.
- Family income should not exceed Rs.4.5 LPA.
- An education loan has to be availed from a member bank of the Indian Banks Association.
- Selection criteria depend on economic index and not on social background.
The loan subsidy schemes mentioned above help meritorious but financially backward students pursue higher education. However, pursuing a higher education involves a lot of other costs, including living costs, transportation costs, medical fees and personal care. Therefore, students can consider taking a loan against property.
With affordable interest rates, longer tenor and lower EMIs, a loan against property is a better way to finance higher education.
However, students need to know everything about loan against property for education before applying for it.
Prospective borrowers can check the pre-approved offers extended by reputed NBFCs on financial products like loans against property and home loans. These offers enable a hassle-free experience in availing loans for pursuing higher education. Existing customers can check their pre-approved offers by entering their names and contact numbers.
Padho Pardesh Scheme and similar education loan interest subsidy schemes enable aspiring students from economically weaker sections of the society to continue their higher studies. However, as education loans offer a limited amount, one can also think of borrowing a loan against property for pursuing their education.