The Indian government has instituted diverse schemes and interest subsidy programs to offer financial aid to students embarking on overseas studies. These endeavors aim to assist students from economically disadvantaged backgrounds and marginalized communities in their educational endeavors. It’s crucial to clarify that while often termed as government education loans for studying abroad, these initiatives do not function as direct loans but rather as schemes providing financial assistance and interest subsidies. By engaging with these programs, students can access advantages such as lowered interest rates, flexible repayment plans, and additional forms of support.
Education loan schemes by the Indian government
Here is a comprehensive compilation of government education loan for study abroad schemes, providing detailed information on each initiative aimed at facilitating financial support for students pursuing international education. Explore the various options available to make informed decisions and access the necessary resources for your educational journey.
Credit Guarantee Fund Scheme for Education Loans (CGFSEL):
Introduced in 2015, this initiative is tailored to support students aspiring to pursue overseas studies without requiring collateral or a co-applicant. Eligible students can secure loans up to INR 7.5 Lakh, provided they belong to the economically weaker section, maintain an annual family income below INR 4.5 Lakh, and gain admission to an approved technical or professional course.
National Minorities Development & Finance Corporation (NMDFC):
NMDFC, a governmental entity, extends loans for professional and career-oriented courses to minorities. Categorized under two credit lines based on family income, credit line 1 offers education loans for domestic studies up to INR 20 Lakh and for international studies up to INR 30 Lakh at a 3% interest rate. The moratorium period spans the course duration plus six months, with a repayment tenure of 5 years. Credit line 2, accommodating those with incomes up to INR 6 Lakh, features varying interest rates (8% for men and 5% for women).
National Safai Karamcharis Finance & Development Corporation (NSKFDC):
Devoted to the economic development of the safai karamcharis/Manual Scavengers community, NSKFDC provides education loans with a maximum limit of INR 10 Lakh for domestic studies and up to INR 20 Lakh for international studies. The interest rate stands at 4% per annum, with a 0.5% rebate for women in India. The moratorium period is 1 year, and the repayment tenure spans 5 years.
National Backward Classes Finance & Development Corporation (NBCFDC):
Education loans for both domestic and international studies are extended by the government undertaking, NBCFDC. Loans of up to INR 15 Lakh for domestic studies and up to INR 20 Lakh for international studies are available to eligible students belonging to backward classes, with a family income not exceeding INR 3 Lakh per annum. The interest rates, set at 4% p.a. for men and 3.5% p.a. for women, come with a moratorium period of 5 years and a repayment tenure of 15 years.
National Scheduled Castes Finance & Development Corporation (NSCFDS):
To support scheduled castes, NSCFDC provides education loans up to INR 20 Lakh for domestic studies and up to INR 30 Lakh for international studies. The interest rate is 4%, with a 0.5% rebate for women beneficiaries. The moratorium period is the course duration plus 6 months, with a repayment tenure of 10 years for loans below INR 7.5 Lakh and 15 years for loans above INR 7.5 Lakh.
National Handicapped Finance & Development Corporation (NHFDC):
Established by the Ministry of Social Justice and Empowerment, NHFDC offers education loans for professional undergraduate and postgraduate courses to students with disabilities. Collateral is required for loans exceeding INR 7.5 Lakh, with loan amounts set at INR 10 Lakh for domestic studies and INR 20 Lakh for international studies. The interest rate is 4%, with a 0.5% rebate for women beneficiaries. The moratorium period is the course duration plus 1 year, and the repayment tenure spans 7 years.
National Scheduled Tribes Finance and Development Corporation (NSTFDC):
Administered by the Ministry of Tribal Affairs, NSTFDC provides financial aid for technical and professional courses in India or abroad. Loan amounts range up to INR 20 Lakh for domestic studies and up to INR 30 Lakh for international studies. The interest rate is 4%, with a 0.5% rebate for women beneficiaries. The moratorium period is 6 months after the course is completed or employment is obtained, with a repayment tenure of 10 years for loans below INR 7.5 Lakh and 15 years for loans above INR 7.5 Lakh.
In summary, the Indian government has established a comprehensive array of education loan alternatives for overseas studies, spanning public banks, private banks, and NBFCs. Furthermore, specific government schemes such as CGFSEL and initiatives led by NMDFC, NSKFDC, NBCFDC, NSCFDS, NHFDC, and NSTFDC cater to distinct demographic groups, providing targeted financial assistance and interest subsidies. Collectively, these endeavors strive to empower students from economically underprivileged backgrounds, championing the principles of inclusive education and accessibility to higher international studies. The nuanced strategy of the Indian government underscores dedication to nurturing educational opportunities and fostering equity across diverse segments of the population.