CSIS Education Loan Scheme: Eligibility & Courses Covered

The Government of India introduced the CSIS education loan subsidy scheme to provide deserving and eligible students with an interest-only loan. 

Read on blog to understand the CSIS subsidy, the documents required and mainly how to apply for the CSIS scheme. 

By the end of this blog you would know: 

1. This scheme is meant only for the economically weaker sections of the society. But what is the limit? How to find out if you are eligible for this? 
2. How to apply for the scheme, what are the documents required and  how to check the status? 
3. Does it also cover abroad education and what are the other government of india interest subsidy schemes for education loan ? 

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What is CSIS in Education Loan?

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.

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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CSIS Education Loan Eligibility

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: 

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 a 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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Features of the Central Sector Interest Subsidy Scheme 

The CSIS education loan offers flexible funding, providing up to ₹10 lakhs in subsidy, supporting diverse educational pursuits from undergraduate to postgraduate courses.

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

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.

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You might also like to read How do Education Loans Work in India? To have a better understanding of education loans and the options available to you. 

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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. 

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

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Can You Get a CSIS Education Loan for Studying Abroad?

The Central Sector Interest Subsidy Scheme (CSIS) provides interest subsidies on education loans for students pursuing higher education in India. However, this scheme doesn't cover loans for studying abroad.

But don’t worry—there are other government schemes that support students who want to study overseas.

1. Padho Pardesh Scheme

This scheme offers 100% interest subsidy on education loans for students from minority communities looking to pursue higher education abroad. It’s available for Master's, Ph.D., and M.Phil courses. To qualify, the annual family income must not exceed ₹6 lakhs.

2. Credit Guarantee Fund Scheme for Education Loans (CGFSEL)

For those who prefer a collateral-free loan for studying abroad, the CGFSEL allows loans up to ₹7.5 lakhs. The Government guarantees 75% of the loan amount, providing extra security in case of default.

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How to Apply for CGFSEL and Padho Pardesh Scheme? 

Both these schemes are accessible via the JanSamarth Portal, which streamlines the application process. It’s also a good idea to get in touch with your bank to fully understand the details and eligibility requirements.

While CSIS is limited to domestic studies, these alternative schemes can help you fund your education abroad with ease. Take some time to explore your options and see what fits best for you!

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You can also explore the education loan for abroad studies in this blog. Know about the top lenders, features, documents, eligibility and how to get an education loan easily with Propelld.

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Other Interest Subsidy Schemes by Government of India

1.  Padho Pardesh Scheme: Empowering Minority Students to Study Abroad

The Padho Pardesh Scheme, introduced by the Ministry of Minority Affairs, aims to support minority students pursuing higher education abroad. Under this scheme, the government takes care of the interest on education loans during the course period, plus one year or six months after securing a job, whichever comes first.

Key Features:

1. Interest Payment

The government covers interest during the course and for one year or six months after employment.

2. Eligibility

Designed for students from minority communities pursuing Master’s, M.Phil., or PhD courses abroad.

3. Income Limit

The combined annual income of the applicant and their parents must not exceed ₹6 lakh.

By covering the interest burden, this scheme enables students to focus on their academic journey without the stress of loan repayments.

2. Dr. Ambedkar Scheme: Empowering OBC and EBC Students for Overseas Education

The Dr. Ambedkar Scheme of Interest Subsidy is a government initiative designed to support students from Other Backward Classes (OBCs) and Economically Backward Classes (EBCs) who wish to pursue higher education abroad. The scheme offers an interest subsidy on education loans, helping make international education more affordable and accessible.

Key Features:

1. Interest Subsidy

The government covers the interest on loans for students studying overseas.

2. Eligibility Criteria

• Open to Indian nationals.
• Applicants must be enrolled in approved Master’s, M.Phil., or PhD programs.
• The loan must be availed from a scheduled bank under the Indian Banks Association Education Loan Scheme.
• The combined annual income of the applicant and their guardian/parent should not exceed ₹6 lakh.
• Applications must be submitted during the first year of the course.

This scheme is a valuable opportunity for students from OBC and EBC backgrounds, offering financial support to help them pursue their academic goals abroad without the added stress of high-interest loan repayments.

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CSIS Important Information PDF Download

Guidelines for CSIS Education Loan  wef 01.04.2022.

Income Certificate Issuing Authority in each state.

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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.

Can I apply for the CSIS subsidy if my family’s income is higher than ₹4.5 lakh?

No, to be eligible for the CSIS subsidy, the combined annual income of the student's family (parent/guardian) must not exceed ₹4.5 lakh.

Is there any age limit to avail of the CSIS subsidy?

There is no specific age limit mentioned for the CSIS subsidy. However, the student must meet other eligibility criteria, including the financial income limit and course requirements.

What happens if my loan application is rejected for the CSIS subsidy?

If your loan application for the CSIS subsidy is rejected, you will not be eligible for the interest subsidy. However, you can explore other loan schemes or government subsidies available for students.

How long is the moratorium period under the CSIS scheme?

The moratorium period is the duration of the course plus one year after completion or six months after securing a job, whichever is earlier.

Can I use the CSIS subsidy for part-time or distance learning courses?

No, the CSIS subsidy is available only for full-time professional or technical courses from recognized institutions in India.

What if I take a break from my studies during the course?

If you take a break from your studies, the subsidy eligibility may be affected. The government subsidy will continue only if the course is completed successfully.

How can I check if my institution is recognized under the CSIS scheme?

Institutions that are accredited by bodies like NAAC, NBA, or other relevant regulatory authorities are eligible under the CSIS scheme. You can check the official list of recognized institutions on the Ministry of Education or the CSIS portal.

What if I have already started my course before applying for the CSIS subsidy?

You must apply for the CSIS subsidy at the time of applying for your education loan. If you have already started your course, you may not be eligible to apply for the subsidy.

Can I apply for the CSIS subsidy if my course is not a technical or professional course?

No, the CSIS scheme specifically applies to professional and technical courses. Courses like engineering, medical, law, etc., are covered, but other academic courses are not.

How do I know if I have been selected for the CSIS subsidy?

Once your application is submitted, you will be informed by the bank or through the CSIS portal if you qualify for the subsidy. You will also receive updates regarding the disbursement of the subsidy.

Does the CSIS subsidy cover only tuition fees?

The CSIS subsidy applies to the education loan interest, not the principal loan amount. Therefore, it covers the interest that accrues on the loan during the moratorium period.

Can I use the CSIS subsidy for loans taken from private banks?

The CSIS subsidy is only applicable to loans taken under the IBA Model Education Loan Scheme, which includes public sector banks and some private banks that follow the IBA guidelines.

Is there any specific time frame within which I should apply for the CSIS subsidy after securing admission?

You must apply for the CSIS subsidy when submitting your education loan application. It is important to initiate this process as soon as possible after securing admission to a recognized course.

What should I do if I need to cancel or change my loan after applying for the CSIS subsidy?

If you need to cancel or change your loan after applying, it’s essential to inform the lending bank and update your application with the necessary details. Any changes may affect your subsidy eligibility.

Can I apply for the CSIS subsidy if I have a loan from a non-scheduled bank?

No, the CSIS subsidy is available only for loans taken from scheduled banks under the Indian Banks Association (IBA) Model Education Loan Scheme. If your loan is from a non-scheduled bank, you will not be eligible for the subsidy.

If I opt for the CSIS subsidy, will it affect my credit score?

No, the CSIS subsidy only covers the interest during the moratorium period, and it will not affect your credit score. However, once the moratorium period ends, your responsibility for repaying the principal loan amount starts, which will impact your credit score depending on repayment behavior.

Can I apply for the CSIS subsidy if I am pursuing a dual degree program?

Yes, if your dual degree program is a recognized professional or technical course from an accredited institution, you are eligible for the CSIS subsidy. However, you can only apply once, so if the program spans both undergraduate and postgraduate levels, it will be considered a single application.

Does the CSIS subsidy cover loans taken from multiple banks?

Yes, if you have taken loans from more than one bank for the same course, you can apply for the CSIS subsidy. The subsidy will cover the interest on the combined loan amount up to ₹10 lakhs, but the loan must still be taken under the IBA Model Education Loan Scheme.

Can I apply for the CSIS subsidy if I am pursuing a distance education course?

No, the CSIS subsidy is available only for full-time professional and technical courses from recognized institutions. Distance education courses are not eligible under this scheme.

How long does it take for the subsidy to be credited to my loan account?

The disbursement of the subsidy can take some time, typically ranging from a few weeks to a few months, depending on the processing time at the bank. You will be notified once the subsidy is credited to your loan account.

Can I get the CSIS subsidy if I apply for an education loan for a course that is not approved by the IBA Model Education Loan Scheme?

No, the CSIS subsidy applies only to loans that are taken under the IBA Model Education Loan Scheme, which includes courses approved by recognized accrediting bodies. If your course is not part of this scheme, you will not be eligible for the subsidy.

Will I be eligible for the CSIS subsidy if I study part-time while working?

No, the CSIS subsidy is only available for full-time students. Part-time courses or those taken while working are not eligible for the subsidy under the scheme.

Can I avail the CSIS subsidy if I have availed of other scholarships or financial aid?

Yes, the CSIS subsidy can be availed in conjunction with other scholarships or financial aid, as long as those schemes do not provide interest subsidies on the same loan. However, the subsidy cannot be combined with other interest subsidy schemes from the central or state governments.

What if I miss the deadline for applying for the CSIS subsidy?

If you miss the deadline for applying for the CSIS subsidy, you may not be able to avail of it for that academic year. It’s crucial to apply as soon as possible after securing admission and before taking the loan.

If I take a loan for my education abroad but later decide to study in India, can I still apply for the CSIS subsidy?

No, the CSIS subsidy is only applicable to loans for education within India. If you decide to study in India after initially planning to study abroad, you may be eligible for the subsidy, but the loan must be for an eligible course in a recognized institution within India.

If I have completed my course but haven’t secured a job yet, am I still eligible for the CSIS subsidy?

Yes, as long as you complete your course and the loan is active within the moratorium period, the government will cover the interest during the course duration and up to one year or six months after completing your course, whichever comes first.