— Ankit Mehra
One of the major factors that students consider when researching higher education abroad is the cost of education. The rising cost of education, inflation, the falling value of the rupee, and the increase in interest rate as a result of repo rate hikes has further pushed students to look for smart ways to finance higher education abroad.
One of the best options to save costs on financing abroad higher education is to make use of government loan schemes that offer the lowest interest rates and interest subsidies. Below is a list of government education loan programmes and interest subsidy schemes that students who wish to study abroad can consider:
National Backward Classes Finance and Development Corporation (NBCFDC)
NBCFDC is a non-profit organisation set up under the Ministry of Social Justice and Empowerment, Government of India to uplift the members of the backward classes living below double the poverty line. One of the best schemes by the organisation is an education loan to pursue technical and professional courses abroad (and also in India).
Students admitted to a graduate-level or above course with a family income of up to Rs 3 lakh are eligible under this scheme. The scheme will fund 85 per cent of the expenses subject to a maximum of Rs 20 lakh for abroad education. The remaining expenses, if any, will be borne by the student.
National Minorities Development and Finance Corporation (NMDFC)
A non-profit company under the Ministry of Minority Affairs to provide financial concessions to members of minority communities, living below double the poverty line. There are two education loan schemes depending on the income ceiling.
Government of Goa interest-free education loan scheme
The objective of the scheme is to promote higher education by providing interest-free loans to the youth of Goa for higher education abroad. Any student (below the age of 30), who has been a resident of Goa for 15 years or more can apply for a loan to pursue higher education abroad.
Students with a family income of Rs 12 lakh per annum can apply for an education loan of Rs 16 lakh disbursed over two years. Eligible courses under this scheme are engineering, dentistry, medicine, pharmacy, architecture, finance, law, fine arts, home science, management, and computer science.
Credit Guarantee Fund Scheme for Education Loans (CGFSEL)
This scheme is for students to get an education loan of up to Rs 7.5 lakh without any collateral or third-party guarantee. The credit risk guarantee fund scheme provides a guarantee on education loans given by banks under the Model Education Loan Scheme of the Indian Banks’ Association.
Students can apply for the loan under this scheme if they belong to the Economically Weaker Section (EWS) category, and the family income is less than Rs 4.5 lakh. Students are eligible under this scheme even if the loan amount they require is more than the amount stipulated in the same.
Features of this scheme –
Some other organisations under the Government of India providing similar education loan schemes at a lower cost are National Safai Karamcharis Finance and Development Corporation (NSKFDC), National Scheduled Castes Finance and Development Corporation (NSCFDC), National Handicapped Finance and Development Corporation (NHFDC), and National Scheduled Tribes Finance and Development Corporation (NSTFDC).
The Government of India also launched interest subsidy schemes to help students manage their education loan debt. Under these schemes, the interest is borne by the government for the moratorium period. Some of the schemes providing this benefit are:
Central Sector Interest Subsidy Scheme
The Ministry of Human Resource Development launched this scheme in 2009 to facilitate higher education financing for students belonging to financially weaker backgrounds. The interest subsidy scheme is applicable only for technical/professional courses in India. The scheme cannot be availed on loans for abroad education.
Some features of the scheme:
Padho Pardesh Education Loan Interest Subsidy Scheme
Established in 2006, the scheme provides an interest subsidy to students belonging to economically weaker sections of notified minority communities to provide better higher education opportunities abroad and enhance their employability.
Some features of the scheme:
Dr. Ambedkar Central Sector Scheme of Interest Subsidy
Dr. Ambedkar Central Sector Scheme of Interest subsidy promotes educational advancements for students from Other Backward Classes (OBC) and Economically Backward Classes (EBC). The subsidy is on the interest payable for the period of moratorium on education loans for abroad students at Masters, MPhil, and PhD levels.
Some features of the scheme:
(The writer is the CEO and co-founder of GyanDhan)
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