Government of India Interest Subsidy Schemes for Education Loans
South Indian Bank allows its education loan applicants to apply for interest rate subsidies under one government scheme, viz.
- Central Scheme of Interest Subsidy for Education Loan
Interest subsidies help lessen the burden of education loans. However, they should only be availed by the people who need them. If a borrower is found to have availed the interest subsidy by submitting false documents then the subsidy will be withdrawn. The subsidy already paid will be recovered with penal interest. Criminal action will also be taken against the borrower as per extant laws.
Let us nowlook at interest subsidy scheme in detail.
Features of Central Scheme of Interest Subsidy for Education Loans
Why this Scheme?
Under this scheme, the Central Government takes care of any interest component that arises during the moratorium phase of an education loan taken by economically weaker students. The moratorium usually comprises of the duration of the course and an additional time of 12 months after completion of the programme or 6 months after landing a job, whichever is earlier.
- The maximum loan amount provided without any collateral security and third-party guarantee under this education scheme is Rs. 7.5 lakhs
- The scheme is only available for economically weaker students who are pursuing technical or professional education studies in India. Economically weaker sections refer to families that earn a gross yearly income of Rs. 4.5 lakh or less
- The students will have to show an income proof from such public authorities as are authorised by the state governments for certification of income status for this scheme and other central and state sector schemes
- The scheme will be available to eligible students only once, either for their first undergraduate or post-graduate degree or diploma courses in the country. The subsidy shall also be applicable to integrated graduate and post-graduate courses
- The scheme will not apply to students who stop pursuing studies, unless it was for a medical reason
- The scheme will apply to courses from all accredited universities and institutions, and professional courses recognised by UGC, AICTE, etc.
- The Interest Subsidy Scheme on Education Loans will also apply to courses in Central Institutes of Hotel Management and Catering Technology, State Institutes of Hotel Management and Catering Technology, Food Craft Institutes and Indian Institutes of Tourism and Travel Management that are administered by the Ministry of Tourism
- The interest rates charged on the educational loan shall be as per the provisions for interest rates under the Educational Loan Scheme opted by the borrower
- Once the moratorium phase ends, the student will be liable to pay the interest on the outstanding loan amount in accordance with the provisions of the Educational Loan Scheme of Banks
Tags with Certificates
- The certificates of students who have availed the scheme will have a tag or a marker that indicate their repayment liabilities to future employers
Other Features to Know
- This is a comprehensive model educational loan scheme that was formulated by the Indian Banks’ Association (IBA) for adoption by all scheduled banks and aims at providing financial support from the banking system to deserving or meritorious students to pursue higher education in the country or abroad
- The nodal bank for the scheme is Canara Bank
- South Indian Bank Website: www.southindianbank.com
- Headquarters: Thrissur, Kerala
- Call Centre Number: 1800 425 1809, 1800 102 9408; +91 484 2388 555 (NRIs)