As the cost of education has increased manifold in the last few years, getting an education loan has become a compulsion for those coming from the Middle Class and economically weaker sections of the society. However, getting an education loan is not an easy task. More difficult is to get the benefit of the subsidized education loan facility provided by the government. The single reason for this is the fact that not all are eligible for subsidized education loan facilities provided by the government.

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As per the Union HRD Ministry’s revised “Central Sector Interest Subsidy Scheme 2009”, there are certain conditions that the students need to meet for becoming eligible for subsidized education loans. Take a look:


– Education Loans took under IBA Model Education Loan Scheme.

– Students having parental income up to Rs. 4.5 lakhs per annum.

– Students enrolled in professional/ technical courses only from NAAC accredited institutions or professional/ technical programs accredited by NBA or Institutions of National Importance or Central Funded Technical Institutions (CFTIs). Those Professional institutions/programs, which do not come under the ambit of NAAC or NBA, would require the approval of the respective regulatory body viz, approval of Medical Council of India for Medical courses, Nursing Council of India for Nursing courses, Bar Council of India for Law, etc.

– Admissible only for once either for UG, PG- Also admissible for integrated courses (graduate + postgraduate).

The HRD ministry says, “Interest Subsidy under this Scheme shall not be available to those students who discontinue their course midstream, or who are expelled from the Institution on disciplinary or academic grounds. However, the interest subsidy would be available only if discontinuation is due to medical grounds for which necessary documentation to the satisfaction of the Head of the educational institution needs to be provided.”

The scheme document says, “The scheme is applicable to students belonging to Economically Weaker Sections, i.e. students whose annual gross parental income is up to Rs.4.5 lakhs. The subsidy is admissible only once either for undergraduate or postgraduate or integrated course. Under the scheme, education Ioan is provided without any collateral security and third-party guarantee and for a maximum amount of Rs. 7.5 lakhs.”

Moratorium period: HRD ministry guideline says, “Under the Scheme, interest payable on the Educational Loan for the moratorium period i.e., Course Period plus one year as will be borne by the Government of India. After the period of moratorium, the interest on the outstanding loan amount shall be paid by the student, in accordance with the provisions of the existing Model Educational Loan Scheme of Banks and as may be amended from time to time.”

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