Abroad Education Loan Options for Minority

Under Section 2(c) of the National Commission for Minorities Act of 1992, the Gazette of India acknowledges six minority communities in India: Muslims, Christians, Sikhs, Jains, Buddhists, and Parsis. These six tribes account for just over 19% of the Indian population.

In the past, some of these localities have not fared as well in terms of literacy as the national average. Even in urban regions, just 30% of Muslim males have completed secondary education or above, compared to the national average of 74.04%. The situation is significantly worse in rural regions especially among women.

The high costs of schooling and their relative financial backwardness are two main impediments that have impeded the expansion of education in these communities. Until today, a rural minority youth in India could only dream of attending a foreign institution. Abroad Education loans for minorities are now available from reputable financial organisations, allowing students to pay their study expenses with ease.

Education Loan Schemes for Minorities:

The Ministry of Minority Affairs has taken notice of this issue that some communities are facing and has taken steps to address it. The government has initiated a number of initiatives aimed at expanding education penetration among these groups’ members.

The following are some of the government programs aimed at improving minorities’ educational opportunities:

1. Padho Pardesh

Objective:

The objective is to provide eligible students from the aforementioned minority populations with interest-free education loans for their international studies. Its goal is to increase these individuals’ employability by allowing them to study at international universities.

 Eligibility criteria:

•   Must have been accepted into a recognised Master’s, Ph.D., or M.Phil. programs abroad.
•   Must belong to a minority group.
•   Should have taken a loan from a scheduled bank under the Indian Bank Association’s (IBA) Educational Loan Scheme.
•   The family’s total income from all sources shall not exceed Rs. 6 lakh per year.

Benefits:

Full interest is waived off during the moratorium period. Interest subsidy is available only up to the moratorium period as prescribed by the Indian Banks Association’s Education Loan Scheme (IBA).

NOTE: Those who apply for a Padho Pardesh loan will only be eligible for an interest subsidy on loans up to Rs 20 lakh. Only the interest on loans up to 20 lakhs is refunded for loans over this amount.

 Procedure and requirements:

After an applicant has been accepted by a recognised university, he must contact a member of the IBA bank and request to process the application under the Padho Pardesh Scheme. The bank’s education loan programme must adhere to the IBA’s model education loan programme, which one should validate with the bank when he applies.

(NOTE: NBFC (non-bank finance companies) education loans are not eligible for this or any of the government programmes mentioned in this article.) The form is forwarded to the appropriate department of Minority Affairs for processing after filling out the loan documentation and attaching the needed documents.

2. Dr. Ambedkar Central Sector Scheme

https://web.umang.gov.in/landing/department/dr-ambedkar-central-sector-scheme-of-interest-subsidy.html

Interest subsidy is provided by Central Sector Scheme to the OBCs and EBCs students on the interest payable for the moratorium period. This is applicable for the Abroad Education Loans to pursue approved courses at Masters, M.Phil. and Ph.D. level.

 Objective:

The scheme’s goal is to assist meritorious students from the OBCs and EBCs with interest subsidies so that they can pursue higher education overseas and improve their employability.

 Eligibility criteria:

•   Must be an Indian citizen of EBC/OBC category.
•   The total family income of OBC candidates must not exceed Rs.3 lakh per year.
•   The family income of EBC candidates must not exceed Rs. 1 lakh per year.
•   Must have a certificate/proof of EBC/OBC membership.
•   Should have taken out a loan from a scheduled bank under the Indian Bank Association’s (IBA) Educational Loan Scheme.

Benefits:

Full interest is waived off during the moratorium period. Interest subsidy is available only up to the moratorium period. Further, the interest on an amount up to 20 lakhs is reimbursed if applied for loans beyond Rs. 20 lakhs.

Procedure and requirements:

After being accepted into a university, you must submit an application to the lending bank, together with your admission papers, requesting a loan under this scheme. This policy does not apply to education loans taken out by NBFCs (non-bank finance companies). The bank will handle the application and transmit it to the Ministry of Social Justice and Empowerment after receiving all needed papers. 

It’s worth noting that every year, half of the budget is set up for female students.

3. CSIS – Central Scheme of Interest Subsidy for Education Loans:

https://www.vidyalakshmi.co.in/Students/resources/SubsidyScheme.html

One of the government’s main goals is to ensure that no student is denied the opportunity to continue higher education due to financial constraints. In 2009, the Ministry of Human Resource Development (MHRD) developed CSIS to achieve this goal. The scheme gives a complete interest subsidy on modern education loans for pursuing technical/professional courses in India during the moratorium period, without any collateral security or third-party guarantee. The scheme is open to students whose annual gross parental/family income is up to Rs.4.5 lakhs. On March 28th, 2018, the Cabinet approved a modification to the current Scheme.

 Objective:

This scheme provides affordable higher education to all categories of economically disadvantaged students pursuing professional/technical degrees in India alone. It aims to improve the lives of students at all levels and increase the number of qualified technicians and professionals in the country. The goal of CSIS is to address the current regional imbalance in Gross Enrolment Ratio (GER) in Higher Educational Institutions.

 Moratorium Period:

The interest subsidy is granted for the duration of the moratorium, which is either 12 months after the course completion or 6 months after the employment is obtained (whichever is earlier). The interest subsidy is tied to IBA’s existing Education Loan programme and is only available to students enrolled in authorised technical/professional courses.

 Eligibility criteria:

•   Must have been accepted into one of the approved programmes at a reputable Indian/foreign university.
•   Should have taken up a loan from a scheduled bank under the Indian Banks’ Association’s (IBA) Educational Loan Scheme. NBFC loans, once again, are not eligible for this incentive.
•   The family’s total income from all sources must not exceed Rs. 4.50 lakh per year.

 Benefits:

A full interest subsidy is offered only for the moratorium period. Further, the interest on an amount up to 20 lakhs is reimbursed, if applied for loans beyond Rs. 20 lakhs.

 Procedures and requirements:

The CSIS process begins with the bank where the loan will be sanctioned, much like the other schemes. The required documents must be added to the form, and the bank will handle the rest of the process.

Note: It’s crucial to keep in mind that government programmes aren’t easy to apply for, and the procedure might be complicated at times. Their websites aren’t updated as frequently as they should be. The official website of PADHO PARDESH, for example, was last updated in 2018.