The Indian government has implemented various initiatives and interest subsidies to financially support students seeking education opportunities overseas. These efforts are designed to help individuals facing economic challenges and belonging to marginalized communities in their educational pursuits. It’s essential to note that although commonly referred to as government education loans for studying abroad, these programs are not direct loans but rather initiatives offering financial aid and interest subsidies. Through these schemes, students can benefit from features such as reduced interest rates, flexible repayment options, and additional forms of assistance.
Government-backed education loan schemes in India
Credit Guarantee Fund Scheme for Education Loans (CGFSEL)
Introduced by the Indian Government in 2015, the Credit Guarantee Fund Scheme for Education Loans (CGFSEL) is tailored for students aspiring to study abroad, eliminating the need for collateral or a co-applicant. Under this initiative, eligible students can secure loans up to INR 7.5 Lakh without collateral or a co-applicant. Criteria include belonging to the economically weaker section, having an annual family income below INR 4.5 Lakh, and securing admission to an approved technical or professional course.
National Minorities Development & Finance Corporation (NMDFC)
NMDFC, a government body, extends loans for professional and job-oriented courses to minorities, categorized under two credit lines based on family income. For credit line 1 (income up to INR 1.20 Lakh in urban areas and INR 98,000 in rural areas), abroad study loan by government in India extends up to INR 20 Lakh, and for study abroad, up to INR 30 Lakh at a 3% interest rate, with a moratorium period of course duration plus 6 months and a repayment tenure of 5 years. For credit line 2 (income up to INR 6 Lakh), the interest rates vary (8% for men and 5% for women).
National Safai Karamcharis Finance & Development Corporation (NSKFDC)
Dedicated to the economic development of the safai karamcharis/Manual Scavengers community, NSKFDC provides education loans with a maximum limit of INR 10 Lakh for studies in India and up to INR 20 Lakh for studies abroad. The interest rate is 4% per annum (with a 0.5% rebate for women in India), a moratorium period of 1 year, and a repayment tenure of 5 years.
National Backward Classes Finance & Development Corporation (NBCFDC)
NBCFDC, a government undertaking, extends education loans for both domestic and international studies. Eligible students, belonging to backward classes with a family income not exceeding INR 3 Lakh per annum, can avail loans up to INR 15 Lakh for studies in India and up to INR 20 Lakh for studies abroad. The interest rates are 4% p.a. for men and 3.5% p.a. for women, with a moratorium period of 5 years and a repayment tenure of 15 years.
National Scheduled Castes Finance & Development Corporation (NSCFDS)
For the welfare of scheduled castes, NSCFDC provides education loans with a quantum of up to INR 20 Lakh for studies in India and up to INR 30 Lakh for studies abroad. The interest rate is 4%, with a 0.5% rebate for women beneficiaries. The moratorium period is the course duration plus 6 months, and the repayment tenure is 10 years for loans below INR 7.5 Lakh and 15 years for loans above INR 7.5 Lakh.
National Handicapped Finance & Development Corporation (NHFDC)
Formulated by the Ministry of Social Justice and Empowerment, NHFDC provides education loans for professional undergraduate and postgraduate courses to students with disabilities. Collateral is required for loans exceeding INR 7.5 Lakh, with loan amounts of INR 10 Lakh for studies in India and INR 20 Lakh for studies abroad. The interest rate is 4%, with a 0.5% rebate for women beneficiaries, a moratorium period of course duration plus 1 year, and a repayment tenure of 7 years.
National Scheduled Tribes Finance and Development Corporation (NSTFDC)
Established by the Ministry of Tribal Affairs, NSTFDC offers financial aid for technical and professional courses in India or abroad. Loan amounts range up to INR 20 Lakh for studies in India and up to INR 30 Lakh for studies abroad. The interest rate is 4%, with a 0.5% rebate for women beneficiaries. The moratorium period is 6 months after the course is completed or employment is obtained, and the repayment tenure is 10 years for loans below INR 7.5 Lakh and 15 years for loans above INR 7.5 Lakh.
Dr. Ambedkar Central Sector Scheme
The Dr. Ambedkar Central Sector Scheme provides interest subsidies on education loans for meritorious students pursuing approved Masters, M.Phil, or Ph.D. courses abroad. Eligible candidates from the Economically Backward Class (EBC) or Other Backward Class (OBC) can apply, with family income limits of INR 8 Lakh per annum for OBC and INR 2.5 Lakh per annum for EBC. While the loan amount is unspecified, the scheme prioritizes financially disadvantaged students, emphasizing its commitment to supporting higher education for deserving individuals.
Central Sector Interest Subsidy (CSIS)
Introduced by the Ministry of Human Resources Development and the Department of Higher Education, the Central Sector Interest Subsidy (CSIS) targets economically weaker students pursuing technical or professional courses in India. To qualify, students must secure admission to a recognized Indian or foreign university, with a total family income not exceeding INR 4.50 Lakh
In essence, the Indian government’s education loan initiatives aim to support students pursuing overseas education, especially those from economically challenged backgrounds. These programs, termed government education loans for studying abroad, provide crucial financial aid, including reduced interest rates and flexible repayment options. From CGFSEL to specialized corporations like NMDFC and NSKFDC, these efforts ensure inclusive access to education. Schemes like Dr. Ambedkar Central Sector Scheme and CSIS prioritize meritorious and economically weaker students, highlighting the government’s commitment to fostering academic pursuits and overcoming financial barriers.