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  CENTRAL SCHEME FOR INTEREST SUBSIDY ON EDUCATION LOANS Central Scheme for Interest Subsidy has been announced by Ministry of HRD forproviding interest on Education Loans during moratorium for technical andprofessional courses for studies in India under the IBA Model Education LoanScheme for students from Economically Weaker Sections (EWS) with annual grossparental/family income upto Rs. 4.50 lacs per annum from the academic year2009-10. 1. Applicability of the Scheme The scheme would be applicable only for studies in recognized Technical/Professionalcourses in India. The interest subsidy shall be linked with the existing Education LoanScheme of IBA and restricted to students enrolled in recognized Technical/Professionalcourses (after class XII) in India in Educational institutions established by Acts of Parliament, other institutions recognized by the concerned Statutory Bodies, IndianInstitutes of Management (IIMs) and other institutions set up by the Central/StateGovernment. Under IBA Model Education Loan Scheme for studies in India maximum eligibleloan limit is Rs.10 lacs.   2. Moratorium Period The subsidy is provided for the period of moratorium i.e. 12 months after completion of thecourse or six months after getting the job,whichever is earlier as prescribed under the IBAModel Education Loan Scheme. After the moratorium period is over, the interest on theoutstanding loan amount shall be paid by the student in accordance with the provisions of the Education Loan Scheme. 3. Criteria for Economically Weaker Section/ Income Limit The benefit of the scheme would be applicable to those students belonging toeconomically weaker sections with an annual gross parental/family income with upper limitof Rs.4.5 lacs per year (from all sources).   4. Competent Authority to issue Certificate The Ministry of HRD, Government of India has issued an Advisory to all the StateGovernments requesting them to designate appropriate authority or authorities who arecompetent to issue income certificates, based on economic index and not socialbackground for the purpose of this scheme. Banks shall implement the scheme based onthe notification of the certification authority by State Governments communicated throughDistrict Level Consultative Committees (DLCCs). The DLCCs would be given the list and thesignatures of the competent authority to issue the income certificate. 5. Eligibility for Interest Subsidy The interest subsidy under the scheme shall be available to the eligible students only onceeither for the first undergraduate degree course or the post graduate degree/diploma inIndia. Interest subsidy shall however, be admissible for integrated courses (graduate pluspostgraduate).Interest subsidy under this scheme shall not be available for those students once theydiscontinue the course midstream, or who are expelled from the institutions on disciplinaryor academic grounds. However, the interest subsidy will be available only if thediscontinuation was due to medical grounds for which necessary documentation to thesatisfaction of the Head of educational institution will have to be given.  6.   Awards/ Certificates The Ministry of HRD has initiated the proposal to dematerialize the educationalawards/certificates, setting up of Depository for maintaining the records in dematerializedform and providing service to the users. Banks can have online access for verificationprocess which would eliminate fraudulent practices like forging of certificates and marksheets 7. Nodal Bank The scheme shall be implemented through Canara Bank, which is the Nodal Bank for theMinistry of Human Resources Development. 8. Applicable Academic Year The scheme shall be applicable from the academic year 2009-10 starting 1 st  April 2009. The scheme shall be applicable only in respect of disbursements made by the Banks on orafter 1 st  April, 2009 for the academic year 2009-10, irrespective of date of sanctioning. Incase of loans sanctioned prior to 1.4.2009, for the courses beginning prior to academicyear 2009-10, the interest subsidy is available to the extent of disbursements made after1.4.2009. 9. Disbursement of Interest Subsidy Claims The disbursement of Interest Subsidy Claims to the Banks shall be on half-yearly or yearlybasis which has to be worked out in consultation with the Ministry of HRD. Eligible students have to contact the SBI Branch concerned for any further detailsalong with Income Certificate from the certifying authority.   © Copyright State Bank of India.
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