CSIS Education Loan Scheme: Eligibility & Courses Covered

CSIS Education Loan

Are you looking to avail the Central Sector Interest Subsidy scheme for your education loan? Read this blog to understand the CSIS subsidy, the documents required and mainly how to apply for CSIS scheme. 

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What is CSIS Education Loan, and How Does it Work?

The Central Sector Interest Subsidy Scheme (CSIS) is a government initiative that came into force in 2009 and offers financial aid to Indian students seeking higher education. The initiative aims to reduce the burden of interest rates on educational loans by mainly targeting members of the economically disadvantaged parts of society.

The basic idea behind the CSIS education loan subsidy program is to provide deserving and eligible students with an interest-only loan. This subsidy is available throughout the whole moratorium period, which consists of the course duration plus an extra year after the study ends or after finding work, whichever comes first. 

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Features of the Central Sector Interest Subsidy Scheme 

One of the CSIS education loan’s primary strengths is its flexibility in terms of funding amount. Students who meet the requirements might receive up to Rs 10 Lakh in CSIS subsidy. This range provides individualised financial support for various educational endeavours, from undergraduate to graduate courses.

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Here are some key terms or components of the CSIS education loan scheme: 

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1. Moratorium Time Frame

One of the critical features of the CSIS education loan, or the Central Sector Interest Subsidy Scheme, is its 12-month moratorium period, which extends for the duration of the course. 

Students are not required to pay interest on the loan during this period. This unique feature offers graduates a financial safety net to launch their professions before starting the loan repayment process.

2. Execution via Scheduled Commercial Banks

CSIS education loan functions via scheduled commercial banks, guaranteeing extensive nationwide accessibility. 

This partnership with the Indian Banks' Association's Model Educational Loan Scheme helps provide a smooth and uniform application procedure, facilitating the scheme's accessibility to qualified students.

3. Emphasis on Professional and Technical Courses

The Central Sector Interest Subsidy Scheme, or the CSIS education loan, has a focused strategy. It focuses on professional and technical courses approved by the Central Funded Technical Institutions (CFTIs), Institutions of National Importance, or the National Board of Accreditation (NBA). 

This guarantees that the program offers educational pathways that correspond with the changing needs of the labour market.

Suggested Read: How do Education Loans Work in India? 

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Are you Eligible for CSIS Education Loan?

Students must meet the requirements for the CSIS education loan to be eligible for the total interest subsidy on loans taken out through these programs. The eligibility criteria are: 

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Benefits from CSIS education loan apply to loans taken out under the IBA Model Education Loan Scheme. One of the most critical steps in getting the subsidy is making sure your loan fits within this model.

Suggested Read: Education Loan by Government: Eligibility and Application 2024

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How to Apply for CSIS Scheme for Education Loan 

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Here are the steps to apply for CSIS Education loan: 

‍1. Check Eligibility:

• Ensure your family’s annual income is below ₹4.5 lakh from all sources. The loan is available for students from economically weaker sections (EWS) pursuing professional or technical courses in India​. 
• The subsidy covers the moratorium period (course duration + 1 year) during which the government pays the interest​.

2. Apply for an Education Loan:

• Visit your bank (any scheduled bank under the Indian Banks’ Association’s Model Educational Loan Scheme). You must take out a loan before you apply for the CSIS subsidy​.
• Banks such as SBI, Canara Bank, and others facilitate these loans​.

3. Submit the Required Documents:

• Provide proof of admission, the course fee structure, and a family income certificate issued by a competent authority. This income certificate is critical to determining your eligibility for the subsidy​

4. Subsidy Application:

• Once you’ve secured the loan, your bank will automatically link the loan to the CSIS scheme if you meet the eligibility requirements. No separate application for the subsidy is required from your side, but it’s recommended to follow up with your bank​.

5. Track Your Subsidy:

• You can track the status of your subsidy on platforms like the Canara Bank portal, which serves as the nodal bank​.

Suggested Read: Education Loan Scheme by Narendra Modi: List of Banks 2024

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Income Limit and Income Certificate in CSIS Education Loan

The CSIS Education loan targets people from economically weaker sections of society. Hence, the income certificate is an essential criterion for getting the Loan. 

To get the income certificate, the family’s income has to be less than INR 4.5 lakhs per annum. If you fulfil this criterion, a competent authority from your state can authorise the income certificate. The list of officials who can validate your income certificate as per your state is given in the next section. 

One important thing to note is that the CSIS education loan can not be offered to socially backward classes. It is based solely on the applicant's financial situation. 

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Designated Officials for CSIS Scheme Income Certificate

The following is a list of designated officials authorised to validate your CSIS education loan application according to the state. 

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Besides the CSIS subsidy, you can also apply to the Jansamarth Education loan or the Vidya Lakhmi Education loan. 

CSIS education loan interest rate helps many students in India every year. But if you aren’t eligible for the Central Sector Interest Subsidy Scheme, don’t worry. Propelld offers student-friendly educational loans that are 100% digital and have a quick process. 

Propelld uses many other functional metrics rather than just credit scores to assess your current financial situation, ensuring that more people are able to fulfil their dream of pursuing their favourite educational course. 

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Why Propelld?

Here are some of the many advantages that we offer.

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FAQs About CSIS Education Loan

What is the CSIS education loan?

The Central Sector Interest Subsidy Scheme (CSIS) is a government scheme in India designed to provide interest subsidies on education loans to students from economically weaker sections (EWS). The subsidy covers the interest accrued during the moratorium period, which includes the course duration plus one year or six months after securing a job.

Who is eligible for the CSIS education loan subsidy?

To be eligible for the CSIS subsidy, students must belong to the EWS category with an annual family income of up to ₹4.5 lakhs. The loan must be taken under the IBA Model Education Loan Scheme, and the student must be pursuing a professional or technical course from a recognised institution in India.

Which courses are covered under the CSIS scheme?

The CSIS scheme generally covers professional and technical courses approved by bodies such as NAAC, NBA, or other relevant regulatory authorities. This includes undergraduate and postgraduate programs in engineering, medicine, law, and other fields.

What is the maximum loan amount eligible for the CSIS subsidy?

The maximum loan amount eligible under the CSIS scheme is ₹10 lakhs. This loan must be sanctioned without any collateral or third-party guarantee.

How is the interest subsidy disbursed?

The nodal bank, Canara Bank, disbursed the interest subsidy directly into the student's loan account through the Public Financial Management System (PFMS). The subsidy is typically disbursed quarterly, half-yearly, or yearly.

Can I apply for the CSIS subsidy for an education loan taken to study abroad?

The CSIS subsidy only applies to loans to pursue higher education in India. Loans for studying abroad do not qualify for this scheme.

What happens if I discontinue my course midway?

If you discontinue your course midway for reasons other than medical grounds, you will not be eligible for the CSIS subsidy. The subsidy is only applicable if the course is completed successfully.

Is the CSIS subsidy available for both undergraduate and postgraduate courses?

Yes, the CSIS subsidy is available for both undergraduate and postgraduate courses. It is also applicable to integrated classes that combine both levels of study.

Can I claim the CSIS subsidy more than once?

No, students can use the CSIS subsidy only once during their academic career. It can be used for an undergraduate or postgraduate course, but not both.

What documents are required to apply for the CSIS subsidy?

To apply for the CSIS subsidy, students must provide several documents, including proof of admission, income certificate, mark sheets, and identity proof (e.g., PAN card, Aadhaar card).

How is the interest rate determined for loans under the CSIS scheme?

The interest rate for loans under the CSIS scheme is based on the Benchmark Prime Lending Rate (BPLR) or the Base Rate of the respective bank, per the guidelines of the IBA Model Education Loan Scheme.

Can I get an interest concession under the CSIS scheme?

Some banks may offer a 1% interest concession if the student pays the interest during the moratorium period. However, this is subject to the terms and conditions specified by the lending bank.

How can I track my CSIS subsidy application status?

You can track the status of your CSIS subsidy application through the JanSamarth portal by logging in with your credentials. The portal provides updates on your application and subsidy disbursement.

What happens after the moratorium period ends?

Once the moratorium period ends, the student is responsible for repaying the interest on the outstanding loan amount. The repayment terms will follow the current Model Educational Loan Scheme guidelines.

Are there any penalties for banks not claiming the subsidy on time?

If the lending bank fails to submit the subsidy claim on time, the government will not provide a backlog subsidy for the missed period. The bank is responsible for timely submission of claims to Canara Bank.