Education loan for study abroad: Schemes by Indian Government

The Government of India supports Indian students who want to pursue higher education abroad through schemes that either help to provide financial assistance or interest subsidies to qualifying students. You may need to demonstrate your financial need to be eligible under these schemes. Read on to learn more about how these loan schemes work and who is eligible to apply.

Many state governments also have educational support programs to benefit resident students. Furthermore, the Indian Government offers scholarships and interest subsidies for domestic studies to students identifying with the SC/ST, OBC, and SEBC communities.

Eligibility to Apply for Indian Government Loans

The Indian Government loans for higher education abroad are available for students with a family income of less than INR 6 lakhs. Here are the additional general eligibility requirements to qualify:

• The student must be an Indian national.
• Graduate degree courses require the students to complete Standard XII.
• Students completing Standard X can apply for diploma courses abroad.
• Students pursuing a postgraduate degree abroad must have a qualifying degree from an Indian university (10 plus 2 plus 3 or 10 plus 2 plus 4).
• The student must have been accepted into the university, college, or program abroad.

There may be additional requirements depending on the scheme.

Most Popular Indian Government Schemes for Study Abroad Loans

Gujarat Government Loans for Study Abroad

Under its KCG initiative, the Gujarat government offers education loans for higher studies abroad¹ for students who have completed Standard XII.

The maximum loan amount under this scheme is INR 15 lakhs, with a subsidized interest rate of 4% per annum. Students from socially and economically weaker classes residing in Gujarat with a family income of less than INR 6 lakhs per year can apply for this loan.

Read more about Study Abroad schemes offered by Gujarat Government 👉

NBCFDC Scheme

The National Backward Classes Finance And Development Corporation (NBCFDC) has introduced an education loan for qualifying students accepted to a program overseas.² The student must identify as a qualifying socially disadvantaged class per the central and state government, and the annual family income should not be more than INR 3 lakhs.

The maximum loan amount is INR 20 lakhs with an interest rate of 4%, and female students get a .50% discount on the interest. The loan covers tuition, accommodation, books, equipment, and insurance premiums abroad. Students will have a maximum repayment period of ten years. To learn more about NBCFDC Scheme, prospective students can call 1800-102-3399 for information.

Dr. Ambedkar Central Sector Scheme

The Central Government has introduced the Dr. Ambedkar Central Sector Scheme of Interest Subsidy on Education Loans for Overseas Studies for OBCs and EBCs. This scheme offers interest subsidy for students pursuing Masters, Ph.D., and M.Phil outside India.³

The maximum loan amount for full interest subsidy is INR 20 lakhs. Students belonging to OBC and EBC categories can apply under this scheme. The subsidy is for students that have not benefited from any other subsidy scheme.

How to Apply

Students can apply for education loans online through the Vidya Lakshmi Portal or the respective Government Scheme websites. Eligible students can apply for interest subsidy by providing supporting documents such as income certificates (EBCs and SEBCs) and caste certificates (for OBCs, SC/STs, etc.), depending on the scheme.

Students must also show evidence of admission to the university, college, or program abroad along with their identity and address proof documents.

Loan Disbursal Process

The loan disbursal process depends on the type of loan you apply for.

• Tuition, examination, laboratory, and library fees are generally paid directly to the university. You may be able to request reimbursal of expenses as long as it is a valid expense and there is a receipt.
• Hostel and living expenses are generally transferred to the student’s personal account in India or overseas.

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