PM-USP Central Sector Interest Subsidy Scheme (CSIS) for Education Loans

What is the Central Sector Interest Subsidy Scheme?

The Central Sector Interest Subsidy Scheme was launched on 1 April 2009 to ensure that students from economically weaker families are not denied higher education because of financial constraints.

The scheme is linked to education loans taken under the Indian Banks' Association (IBA) Model Education Loan Scheme from eligible Scheduled Banks, Regional Rural Banks and Co-operative Banks.

Under CSIS, the Government bears the eligible interest during the moratorium period. After the moratorium ends, the borrower becomes responsible for interest and repayment in accordance with the loan agreement and applicable IBA/bank rules.

Eligibility for PM-USP CSIS

A student must satisfy the applicable scheme conditions. The principal requirements include:

• Annual gross parental/family income must be up to ₹4.5 lakh from all sources.
• The education loan must be taken under the IBA Model Education Loan Scheme.
• The course must be an eligible professional or technical course in India.
• The institution/programme must satisfy the applicable accreditation or regulatory approval requirements.
• The subsidy is generally available only once for undergraduate, postgraduate or integrated study, subject to current guidelines.

Eligible Professional and Technical Courses

Current Ministry of Education material provides that CSIS covers eligible professional and technical courses from institutions/programmes falling within specified categories, including:

• NAAC-accredited institutions;
• professional or technical programmes accredited by NBA;
• Institutions of National Importance;
• Centrally Funded Technical Institutions (CFTIs); and
• professional institutions or programmes outside NAAC/NBA coverage where approval of the relevant regulatory body is required.

The Ministry of Education issued an updated public notice dated 25 February 2026 listing professional and technical courses eligible for CSIS benefit. Students should verify that their course and institution fall within the current approved framework.

Education Loan Amount and Interest Subsidy

Older CSIS guidelines referred to a maximum subsidised education-loan amount of ₹7.5 lakh. Current Government material states that PM-USP CSIS provides full interest subvention during the moratorium period on eligible education loans up to ₹10 lakh.

The separate Credit Guarantee Fund Scheme for Education Loans continues to be relevant for collateral-free and third-party-guarantee-free education loans up to the applicable guarantee limit, which is distinct from the current CSIS interest-subsidy ceiling.

Moratorium Period: Course Period Plus One Year

The moratorium period is generally the course period plus one year. During this period, an eligible CSIS beneficiary receives Government support for the applicable interest on the qualifying loan amount.

After the moratorium period ends, the student borrower is responsible for repayment of the outstanding education loan and subsequent interest according to the bank's loan terms and the applicable IBA Model Education Loan Scheme.

When Interest Subsidy May Not Be Available

Under the scheme framework, interest subsidy is generally not available where a student discontinues the course midway or is expelled on disciplinary or academic grounds.

An exception may apply where studies are discontinued for documented medical reasons, subject to the requirements of the scheme and satisfaction of the educational institution/bank.

Income Limit and Income Certificate

The annual gross parental/family income ceiling under PM-USP CSIS is ₹4.5 lakh from all sources.

The borrower must produce an income certificate issued by a competent authority designated by the State Government or Union Territory Administration. The relevant bank may verify the certificate through the issuing authority or State Government system.

CSIS eligibility is based on the prescribed economic criterion and is independent of social-category reservation schemes.

How to Apply or Claim CSIS Interest Subsidy

The student should disclose eligibility for CSIS when applying for or processing the education loan and submit the prescribed income certificate and other supporting documents to the lending bank.

The lending bank verifies eligibility and processes the subsidy claim through the prescribed Government/banking system. Canara Bank continues to act as the nodal bank for administration of CSIS, while current benefit delivery is integrated with the PM-Vidyalaxmi digital ecosystem.

1. Obtain admission to an eligible professional or technical course.
2. Apply for an education loan under the applicable IBA Model Education Loan Scheme.
3. Inform the bank that you seek PM-USP CSIS benefit.
4. Submit the valid parental/family income certificate and required educational documents.
5. Ensure the course/institution satisfies the current Ministry of Education eligibility list.
6. Follow the lending bank's instructions for subsidy processing and digital verification.

PM-USP CSIS vs PM-Vidyalaxmi

Important Points for Students

• CSIS is not a waiver of the principal education loan.
• The Government bears eligible interest only for the specified moratorium period.
• Students should verify the latest eligible-course list before assuming entitlement.
• The income certificate must be from the competent authority prescribed by the State/UT.
• Loan terms, repayment schedule and post-moratorium interest remain governed by the bank and applicable IBA rules.
• Do not confuse the ₹10 lakh CSIS interest-subsidy ceiling with the separate ₹7.5 lakh credit-guarantee threshold.