The Education Loan Subsidy Scheme in 2 Minutes

Today's students face many challenges, one of which is the rising cost of education. Higher education is frequently out of reach for many students, especially those from disadvantaged families. The government has established the education loan subsidy programme to increase the accessibility of higher education for less privileged but deserving students.

Plan Objective

The interest subsidy is available to financially disadvantaged students who take out an education loan from a bank that is a member of the Indian Banks' Association. The interest accumulated on the education loan during the moratorium period will be fully covered by the government-sponsored interest subsidy. An education loan's moratorium period lasts for the length of the course plus an extra six months after finding work, up to a maximum of two years after the course is finished.

Eligibility requirements

The programme is accessible to all deserving students from the economically disadvantaged group (EWS). If the family's combined yearly income is less than or equivalent to Rs. 5.4 lakhs, the students will be considered to be from the EWS. Therefore, regardless of their social background, the interest subsidy would be available to all students who are classified as being in the EWS group. This distinguishes the programme from others that benefit socially disadvantaged groups including minorities, SC, ST, etc. Only the portion of a loan that has been disbursed after the cut-off date will be eligible for the subsidy for loans that were partially disbursed before that date.

Income Verification Records

By the guidance provided by the Ministry of Human Resource Development of the Government of India, the student would need to provide proof of family income from a suitable authority designated by the Government bank. Once the bank receives a legitimate income verification document, it will administer the programme by the necessary guidelines.

Qualifying Courses

Students from EWS enrolling in Professional and Technical programmes at educational institutions in India. These institutions must have been created by the parliamentary act, be IIMs, or have been created by the government to be recognised by the UGC and AICTE.

Added characteristics of the schemes

After completing higher secondary education, a student would be entitled to use the programme for either an undergraduate course or a post-graduate degree or diploma. Integrated courses, for which the interest subsidy will be provided for both the undergraduate and post-graduate components of the course, are an exception to this norm.

Exclusions

The following are some significant exclusions for students who would otherwise be eligible for government aid:

• Students who attend classes abroad.

• Students who withdraw from a course before the end for any cause other than illness.

• Students who are dismissed from the school due to conduct or academic issues.

The following courses are also listed as courses where students are not eligible:

Any course that can be enrolled in without passing the 12th standard examination, including music, sociology, commerce, and science; vocational training; skill development; teacher training; and non-technical courses including music, sociology, commerce, and science.

The upper limit

The programme applies to all student loans, regardless of the total amount borrowed, however it sets an obligation/interest rate cap for loans up to Rs. 15 lakhs.

ORIGINAL CONTENT:- The Education Loan Subsidy Scheme in 2 Minutes