ELTF has been getting lot of enquirers from different part of country seeking clarifications on 'Interest Subsidy Scheme'.
There are two types of Interest Subsidy scheme for students pursuing education in India.
1. First Scheme: For Loans granted / disbursed on or after 1st April 2009;
2. Second Scheme: For Loans granted / disbursed prior to 1st April 2009;
Eligibility
For both the Schemes, the eligibility is as follows:
a) The Education Loan should have been sanctioned under IBA Scheme;
b) The Loan should have been granted to pursue professional or technical courses in approved Institutions after 12th std. (Diploma students joining Engineering Courses through lateral entry are also eligible);
c) The education should be within India;
d) The gross parental income should be less than 4.50 lakhs.
For Loans granted prior to 1.4.2009
In Feb 2014, Shri P Chidambaram (then Finance Minister) announced in the Parliament that Government would reimburse 100% of the interest outstanding as on 31.12.2013. Canara Bank was appointed as Nodal Bank to pool the data. Interest component on all eligible loans outstanding as on 31.12.2013 were paid by the Government to the Banks and credited to the loan accounts.
In this scheme, the students who availed loan prior to 1.4.2009 and who paid the interest regularly, were in a disadvantageous position. Since interest component was either nil or negligible, they did not get any benefit of the interest subsidy. Similarly the students who closed the education loan account before 31.12.2013 were also not eligible to get interest subsidy.
Now this scheme is closed. Now the students cannot claim any interest subsidy under this scheme. We are writing this only for information.
