Scheme of Interest Subsidy on Educational Loan for Overseas Studies

Details
Whether disbursements made during Financial Year 2013-14 in respect of loans sanctioned during earlier years will be eligible?

No, loan sanctioned and disbursed from 2013-14 onwards will only be eligible for interest subsidy.

If student has availed subsidy under any other scheme including the CSIS scheme for undergraduate courses, whether he/she will be eligible under this scheme?

Student will be eligible, as the interest subsidy under the Scheme is for pursuing Post Graduate Diploma, Post Graduate degree course/Masters, M.Phil & Ph.D. Further, those students, who have completed M.Tech in India but is now pursuing MBA abroad and these students have got subsidy under CSIS/ state subsidy scheme for the M.Tech course, are also be eligible in this Scheme.

Is Interest Subsidy guaranteed for all eligible applicants?

Initially the coverage of the Scheme will be flexible and will cover all eligible applicants to the extent possible.

As per Model Scheme of IBA, the maximum loan for study abroad is Rs.20 lakhs. Whether interest subsidy is admissible for loan amount disbursed above Rs.20.00 lakh?

Presently subsidy is restricted to the limits specified under IBA model scheme i.e. Rs 20.00 lakh only.

For Income Certification, whether Bank are required to obtain Income certificate from the Competent Authority declared by State Govt./UT Administration as applicable in CSIS Scheme.

Under Padho Pardesh, Income certificate produced by the student for availing Educational Loan viz. ITR/Form 16/Audited Accounts/Income certificate issued by the authority of State Government/UT Administration is acceptable to Ministry for determining Income ceiling. There is no need to obtain fresh Income certificate from students.

Whether latest income certificate only should be obtained or the income certificate obtained during earlier years/ at the time of availing loan can be taken?

Certificate obtained at the time of availing loan, will be sufficient.

Whether latest income certificate only should be obtained or the income certificate obtained during earlier years/ at the time of availing loan can be taken?

Yes, Self-declaration in this regard is sufficient.

What is the 'Meritorious' element in the Scheme for eligibility for interest subsidy?

Those who have secured admission abroad and are eligible as per Scheme Guidelines will be considered as meritorious under the Scheme.

If the course pursued by the minority student is partly in India and partly abroad, shall be eligible for the interest subsidy?

Such students will be eligible for interest subsidy, if the Degree is awarded by Foreign University.

FAQ’s for Students

Who is eligible for this Scheme?

Students who belong to minority communities viz. Muslims Christians, Sikhs, Buddhists, Jains, and Parsis and want to pursue higher studies i.e. Masters, M.Phil & Ph. D level abroad.

What will be the time period for interest subsidy?

Interest subsidy will be granted for the period of moratorium (i.e. course period, plus one year or six months after getting job, whichever is earlier) as prescribed under the Education Loan Scheme of the Indian Banks Association (IBA).

What is the procedure to avail the benefit of the Scheme?

Student can avail the benefit of the Scheme by following the given procedure:-

  1. Student should have secured admission in the University Abroad for pursuing Post-graduate Diploma, Masters, M.Phil or Ph. D level courses with the overall family income of not more than Rs. 6.00 lakh per annum. Family income means gross parental income in case of unmarried students and gross income of spouse incase of married students.
  2. Student should have to take the loan from any Private Bank, Public Sector Bank, Scheduled commercial Bank and member urban Cooperative Banks etc. who is a member of Indian Banks Association.
  3. Student should have the proof of belonging to a minority community (details at Q. No. 10).
  4. Student should inform their lending Banks that Ministry of Minority Affairs has launched a new Scheme of Padho Pardesh — interest subsidy on educational loans for pursuing higher studies abroad and he/she is eligible under that particular Scheme. Then the lending Bank will feed the students information into the Portal of Padho Pardesh launched by Canara Bank which is the implementing Agency of this Scheme. The Portal will remain open for the period of two month in every quarter.
Whether Ministry gives educational loan under this Scheme?

No, Ministry does not give educational loan under this Scheme. The Scheme provides reimbursement of Interest accrued on the Education Loan taken by a student from Bank, which is a member of IBA for moratorium period ( i.e. Course period + one year after completion of course or six months after getting employment whichever happens earlier).

How much interest subsidy is given under this Scheme?

Ministry will reimburse 100 % interest component of the Educational loan availed by a student from Bank up to moratorium period ( i.e. Course period + one year after completion of course or six months after getting employment whichever happens earlier).

What documents are required to be submitted for claiming the benefits of the Scheme?

Ministry does not require any document from the student directly. Students have to submit the documents as per requirement of Lending Bank for availing the Educational Loan. Ministry will provide reimbursement of interest accrued on Educational Loan up to moratorium period.

From which Bank, can a student take Education loan?

The interest subsidy is linked with the existing Educational Loan Scheme of Indian Banks Association (IBA). Student can take Educational Loan from any Private Bank, Public Sector Bank, Scheduled commercial Bank and member urban Co-operative Banks etc. which is a member of IBA.

Can some part of the principal component of loan also be covered by this Scheme?

No, Scheme is covering only interest part of the Education loan taken by a student for the period of moratorium (i.e. course period, plus one year or six months after getting job, whichever is earlier).

Is there any periodical report/document to be submitted by student during the course of pursuing his/her studies abroad?

No. MoMA does not require any report/documents. Students have to submit periodical progress reports/documents to their respective lending Banks on time to time during the period of pursuing their studies abroad. On completion of course, student may please submit a copy of Mark list and certificate to the landing Bank as well as Ministry of Minority Affairs for records.

Which Authority will issue Minority Certificate or who will issue Minority Certificate?

You may obtain Minority Certificate from:

  1. Any Religious body who issues such certificate;
  2. From School/College Principal; and
  3. Self declaration