Central Sector Interest Subsidy Scheme on Education Loan (CSIS)

Interest Subsidy Scheme on Education Loan was launched on 1 April 2009. Under this CSIS Scheme, govt. provides full interest subsidy for education loans from Scheduled banks under Model Education Loan Scheme of Indian Banks Association. These loans covers a period of course duration + 1 year.

 

Eligibility of Central Sector Interest Subsidy Scheme (CSIS)

The student must belong to an Economically Weaker Section. Parental income should be lower than Rs 4.5 lacs per annum.

 

For students enrolled in professional / technical courses from institutions

- Accredited by NAAC (National Assessment and Accreditation Council) OR

- Accredited by NBA or institutions of national importance or Centrally funded Technical Institutions (CFTIs) OR

- Other professional institutions approved by respective regulatory body such as Medical Council of India, Dental Council of India, Indian Nursing Council, Bar Council of India etc.

You can get subsidy just once. Therefore, you can either avail subsidy benefit for undergraduate course or for post-graduate course. You can't avail for both. You can avail subsidy if you have enrolled for an integrated program (undergraduate and post-graduate), Education loan must be taken under IBA (Indian Banks Association) Model Education Loan Scheme. IBA Model Loan Scheme is nothing complex but a simple education loan structure that the banks abide by. For instance, moratorium period under an IBA model loan is Course Period + 1 year. For more on IBA guidelines on Model Education Loan, refer to this document.

 

Central Sector Interest Subsidy (CSIS)

The student get interest subsidy during the moratorium period.

Under education loan, students get moratorium on loan repayments. As per IBA model education loan, the moratorium is for Course Period +1 year. However, the interest during the period keeps getting added to the outstanding amount. For instance, if your course duration is 5 years, you will get moratorium for 6 years (5 years + 1 year). During this period, you do not have to pay anything to the bank, but the interest keeps accumulating and gets added to the outstanding principal.

Only simple interest (and not compound interest) is charged during the moratorium period and this interest gets accrued to the outstanding principal. At the end of 6 years, the EMI will be calculated on loan amount.

If the borrower is eligible for the subsidy scheme, then the interest during the moratorium period will be taken care of by the Government. Since the Government pays the interest to the bank during the moratorium period, your loan outstanding will remain reduced accordingly.

Interest subsidy under the scheme shall not be extended to students who discontinue their course midway or those who are expelled from the institution on disciplinary or academic grounds. However, interest subsidy will be available if the studies have been discontinued due to medical reasons.

Once the moratorium period gets over, the interest will be to be borne by the borrower.

 

Applying for Subsidy

The borrower can apply for the subsidy while making loan application. Since there is upper cap on the parental income, applicant is required to furnish an income proof from the authorised public authority of the State Government.

 

Subsidy Scheme Guidelines

Objective of the Scheme

CSIS is a unique scheme which pivots around the vision that no student desiring to pursue higher education is denied of the opportunity if he/ she is financially poor. This scheme benefits all categories of economically weaker students for pursuing professional/ technical courses in India only, and intends to provide affordable higher education. The Scheme, envisages to uplift the students from the grassroot level and increase the number of qualified technicians/ professionals in the nation. CSIS aims to check the existing geographical imbalance with regard to Gross Enrolment Ratio (GER) in Higher Educational institutions

 

Features of the Scheme

The Scheme is adopted by all Scheduled Banks and is linked with the existing Model Educational Loan scheme of the lndian Banks' Association, and restricted to students enrolled in professional/ technical courses only from NAAC accredited institutions or professional/ technical programmes accredited by NBA or institutions of National importance or Central Funded Technical Institutions (CFTls).

Those Professional institutions/ programmes, which do not come under the ambit of NAAC or NBA, would require approval of the respective regulatory body viz, approval of Medical Council of India for Medical courses, Nursing Council of India for Nursing courses, Bar Council of India for Law etc. The scheme is applicable to students belonging to Economically Weaker Sections, i.e. students whose annual gross parental income is up to Rs.4.5 lakhs. Subsidy is admissible only once either for undergraduate or post graduate or integrated course. Under the scheme, education loan is provided without any collateral security and third-party guarantee and for a maximum amount of Rs. 7.5 lakhs.

 

Eligibility for Interest Subsidy Scheme on Education Loan (CSIS)

Education Loans taken under IBA Model Education Loan Scheme.

Students having parental income up to Rs. 4.5 lakhs per annum.

Students enrolled in professional/ technical courses only from NAAC accredited institutions or professional/ technical programmes accredited by NBA or institutions of National importance or Central Funded Technical institutions (CFTls). Those Professional institutions/ programmes, which do not come under the ambit of NAAC or NBA, would require approval of the respective regulatory body viz, approval of Medical Council of India for Medical courses, Nursing Council of India for Nursing courses, Bar Council of India for Law etc.

Admissible only for once either for UG, PG. Also admissible for integrated courses (graduate + post graduate).

Interest Subsidy under this Scheme shall not be available to those students who discontinue their course midstream, or who are expelled from the Institution on disciplinary or academic grounds. However, the interest subsidy would be available only if discontinuation is due to medical grounds for which necessary documentation to the satisfaction of the Head of educational institution needs to be provided.

 

Interest Rates
The interest rates charged on the educational loan shall be as per the BPLR/Base Rate of the individual banks and as per the provisions for interest rates under the IBA Model Educational Loan Scheme

 

Moratorium Period
Under the Scheme, the interest payable on the Educational Loan for the moratorium period i.e., Course Period plus one year as will be borne by the Government of India. After the period of moratorium, the interest on the outstanding loan amount shall be paid by the student, in accordance with the provisions of the existing Model Educational Loan Scheme of Banks and as may be amended from time to time.


Income Limit / Proof

The benefits of the Scheme is applicable to students belonging to economically weaker sections, with having parental income upto Rs. 4.5 lacs per year (from all sources). Income proof is required from authorised Public authority of the State Government. The present scheme is intended to cater to the needs of students belonging to economically weaker sections with prescribed upper parental gross income limit of the family from all sources, which is based on economic index and not on social background. The scheme is independent of any other schemes which may cater to EWS.


Competent Authority for Interest Subsidy Scheme on Education Loan (CSIS)
 

The Ministry of HRD, Government of lndia has issued an Advisory to all the State Governments requesting them to designate appropriate authority or authorities who are competent to issue income certificates, based on economic index and not social background, for the purpose of this scheme.

 

Awards/Certificates
There would be tag/marker on the degree of the student indicating his repaymentliabilities. Electronic Tags will enable employers to identify loanees.

 

Nodal Bank
The Scheme shall continue to be implemented through Canara Bank, which is the Nodal Bank for the Ministry of Human Resource Development. Modalities for implementation and monitoring shall be finalised in consultation with the Canara Bank.


Applicable Academic Year
The Modified Scheme shall be applicable from the academic year 2018-19, starting 1st April, 2018.

The Banks shall implement the Scheme based on the notification of the certification authority by State Governments communicated through District Level Consultative Committees (DLCCs).