Government Education Loan for Students to Study Abroad

The Government of India has implemented various schemes to provide financial assistance and interest subsidies to students pursuing further studies abroad. These initiatives are designed to support students from economically weaker sections and marginalized communities in their educational pursuits. It is important to note that though it is commonly referred to as government of India education loans for study abroad, these initiatives are not direct loans but rather schemes that offer financial aid and interest subsidies. By availing these schemes and govt education loans students can benefit from reduced interest rates, flexible repayment options, and other forms of support. Let's explore some of the key government of India study loans and government schemes that facilitate affordable education and empower students to achieve their academic goals.

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  Indian Government has launched a PM-Vidya Lakshmi Portal where a student can apply and track their education loan application. 
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  Students with family income up to INR 8 Lakhs, get up to 3% concession on the interest rate on loans up to INR 10 Lakhs. 
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  Repayment of education loans for higher education is deductible under section 80E of the Income Tax Act. The yearly limit for deduction is Rs. 40,000 ( for both the principal and the interest) which will be available for a maximum of eight years starting from the day you start repaying. 

Government data reveals that there has been a 50% increase in the number of students applying for the student visa every year. Still, many students receive a rejection on their student visa applications because they cannot fulfill the fund requirement. To decrease the rejection rate, education loans for abroad studies by the Indian government came into effect.

 

Amendments are regular to these schemes to make them effective. Some are mentioned below:

 

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  There are subsidy schemes and a full interest waiver during the moratorium period is provided. 
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  The Government of India interest subsidy scheme is linked with the Indian Banks Association (IBA) and hence applicable only to those banks that are members of the IBA.
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  Loans from NBFCs are not eligible for these schemes.

 

To qualify for a government study loan, applicants generally need to meet the following basic eligibility criteria:

 

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  Academic Performance: Achieved 60% or more in the 12th board examination.

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  Documentation: Must provide valid proof when applying for minority, caste, or EWS-based scholarships.

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  University Admission: An admission letter from the university is mandatory.

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  Nationality: The applicant must be a citizen of the country.

In addition to these requirements, specific schemes may have additional eligibility criteria. It's recommended to check the official website of the respective scholarship or government student loans India for detailed information.

1. Dr. Ambedkar Central Sector Scheme:

The Dr. Ambedkar Central Sector Scheme provides interest subsidies on education loans for overseas studies to students who belong to Other Backward Classes (OBCs) or Economically Backward Classes (EBCs). This govt education loan scheme is available for meritorious students who have secured admission in the approved courses at Masters, M.Phil, or Ph.D. courses abroad.

 

Eligibility criteria:

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  Applicants should either belong to EBC or OBC.
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  For OBC candidates, total family income shall not exceed INR 8 Lakh per annum.
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  For EBC candidates, total family income shall not exceed INR 5 Lakh per annum.

Procedure:

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  After securing admission to a recognized Indian or foreign university, you are required to file an application asking the bank to avail your loan under this scheme. 
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  After submission of the required documents, the bank will process the application and forward it to the Ministry of Social Justice and Empowerment.
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  The Ministry of Social and Justice Empowerment will either accept or decline your application.

2. Central Sector Interest Subsidy (CSIS):

The Ministry of Human Resources Development and Department of Higher Education has formulated this government loan for study abroad interest subsidy for economically weaker sections (EWS) for pursuing technical/professional courses in India. 

 

Eligibility criteria:

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  Applicants should have secured admission to a recognized Indian/foreign university.
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  Applicant’s total family income shall not exceed INR 4.50 Lakh per annum.

Procedure: 

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  The process for CSIS begins from the respective bank from where the loan is to be sanctioned.
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  Required documents are to be attached to the form and the process is taken further by the bank.

3. Interest Subsidy Scheme on Education Loan by the Government of Gujarat:

Education loan for study abroad by the Gujarat government offers a 100% interest subsidy to economically weaker students from Gujarat who wish to pursue higher studies abroad. Through this govt education loan for abroad studies by the Indian government without collateral scheme, students can get up to INR 15 Lakh for overseas study. This govt education loan scheme is available for professional courses at graduate, post-graduate, and diploma levels.

 

Eligibility criteria:

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  Applicants must have secured at least 60% in your 12th grade.
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  The total family income should be less than or equal to INR 6 Lakh annually.
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  The interest subsidy under this scheme will not be available to the students who have left study in the middle of the curriculum or have been expelled from the institutions.

4. Padho Pardesh Scheme:

Please note that this scheme has been discontinued by the Government of India.

 

The objective of the government study loan scheme was to award 100% interest subsidies on education abroad loans to meritorious students belonging to economically weaker sections of society and hence enhance their employability.

 

The students should belong to the notified minority communities (Muslims, Christians, Buddhists, Sikhs, and Parsis) as declared in section 2(c) of the National Commission for Minorities Act, 1992.

 

Eligibility criteria:

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  Students should have secured admission into the approved courses at the Master's, Ph.D., or M.Phil level.
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  They must belong to a minority community as mentioned above. 
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  Candidates should have availed loan from a scheduled bank under the Educational Loan Scheme of the Indian Bank Association (IBA) for the purpose.
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  Total income from all sources of the candidate's family must not exceed INR 6 Lakh per annum.

Procedure:

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  The education loan government of India application process usually begins after a candidate has secured admission to a recognized university/college. 
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  Along with the admission papers (including the offer letter), you must approach the bank of your choice, which needs to be a member of IBA and request the application to be processed under the Padho Pardesh scheme.
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  After filling out the loan application form and attaching the required documents, the form is sent to the respective Department of Minority Affairs for processing.

Here is a video highlighting some of the top government scholarships available for Indian students.

1. Credit Guarantee Fund Scheme for Education Loans (CGFSEL):

In 2015, the Credit Guarantee Fund Scheme for Education Loans (CGFSEL) was introduced by the Government of India. This govt education loan for study abroad is primarily for students who wish to study abroad but do not have any collateral or co-applicant to pledge. Under this scheme, you can get up to INR 7.5 Lakh loan without any collateral or co-applicant. 

Requirements:

 

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  The student should belong to the EWS (Economically Weaker Section) category.
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  The annual family income should be less than INR 4.50 Lakh. 
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  You should have secured admission to a recognized university in India or abroad for an approved technical or professional course.

2. National Minorities Development & Finance Corporation (NMDFC):

The National Minorities Development & Finance Corporation (NMDFC) is a government body that works toward financing the minority sections of society, through State Channelising Agencies (SCAs). NMDFC provides loans to study in India & abroad for professional and job-oriented courses.

 

NMDFC has divided the minorities into two subsections:

 

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  Credit Line 1: It refers to the candidate with an annual family income of INR 1.20 Lakh in urban areas & INR 98,000 in rural areas.

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  Credit Line 2: It refers to the candidate with an annual family income of INR 6 Lakh.

Eligibility Criteria:

The corporation's objective is to provide subsidized financing for self-employment to underserved minorities, including Muslims, Christians, Sikhs, Buddhists, Parsis, and Jains.

 

For Credit Line 1:

For Credit Line 2:

3. National Safai Karamcharis Finance & Development Corporation (NSKFDC):

The NSKFDC actively works toward the economic development of the safai karamcharis/ Manual Scavengers community. Through this government education loan for study abroad, you can avail education loans to study abroad for the following courses:

 

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  Graduation courses in all disciplines.
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  Post-graduation courses in Medical, Engineering, Management, IT, Law, and Computers.
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  Job-related courses having a minimum of 1-year course duration such as Sanitary Inspector, Diploma in Physiotherapy, Pathology, Nursing, Hotel Management & Tourism, Journalism & Mass Communication, and Geriatric Care.

Eligibility criteria:

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  You should be identified under the National Scheme of Liberation & Rehabilitation of Scavengers.
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  You should have obtained admission for a specified professional or technical course for the ongoing academic session.

4. National Backward Classes Finance & Development Corporation (NBCFDC):

The NBCFDC is a government undertaking that provides education loans for both studies in India and abroad. For study in India loans, 90% of total expenses are covered, whereas, loans for abroad education cover 85% of the total expenses.

 

Eligibility criteria:

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  The applicant should be a member of a backward class (as notified by the Central Government/State Government).
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  The per annum income of the family should not exceed INR 3 Lakh. 
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  The applicant should have secured admission to a professional or technical course through an entrance test/merit-based selection process.