Government announces interest subsidy scheme for education loans

The central government has finalised a scheme to provide full interest subsidy during the period of moratorium on educational loans for students belonging to economically weaker sections (with parental family income from all sources of less than Rs4.5 lakh annually).

The ministry of human resource development has finalised the modalities for implementation of the new central scheme in consultation with the Indian Banks Association (IBA).

Such loans would be available to students from the economically weaker sections pursuing courses of studies in professional/technical streams from recognized institutions in India, a government release said on Thursday.

The scheme is applicable to all IBA-approved educational loans sanctioned for `eligible students' in respect of `approved' course of studies from the academic year 2009-10.

For availing the loan, applicants have to provide proof of income certified by authorities to be designated by the state governments.

The HRD ministry said it has written to all chief secretaries of states and union territories to intimate the designated authorities at the district/sub-district/block levels of the district level consultative committee (DLCC) so that banking authorities at the branch level where students would be approaching for availing the benefit of the scheme.