India is a developing country and we know the vital importance of education in our country. The Government also understands education is a primary sector of investment that will give a good return in future. The contribution of a well educated society is higher in the dreams of a developing nation and in the economic and social progress of the country.

Facilitate Higher Education

When we talked about economic progress and education sector, it is the higher education system which needs greater attention. The Government is somehow able to manage the primary education system by implementing a lot of policies. But it seems to be very difficult for the Government to make the Higher Education sector feasible to the vast group.

One main reason behind this is the low income of the citizens and this act as a block between the students from the economically backward families and higher education. Hence to make possible higher education to everyone and thereby no talent will be denied from accessing desired education, the Government of India came up with CSIS, Central Scheme to Provide Interest Subsidy in the Education Loan system.

Why CSIS?

CSIS stands for Central Scheme to provide Interest Subsidy. This is the education loan system of technical/professional education as formulated by the Indian Bank Association (IBA) and is applicable to all the Banks operating in India. The students from the economically weak families will get a full interest subsidy during the moratorium period provided by the Scheme.

Normally the moratorium period in India for education loan is set as course duration added with twelve months or six months after having a job, whichever is the earlier.

Applicability of the Scheme

The policy is applicable to all the listed Banks in India and the students taken loan for the technical/professional education under the recognized universities/institutions in India can enjoy this provision. The interest funded is connected to the present Education Advance scheme of IBA and the institute/universities are either under Acts of parliament, concerned Statutory Bodies, IIMs or under Central/State Government.

Interest Rates

The interest rate issued as per the set Base rate and the policies of the individual banks. But it is statutory that the Banks should follow the provisions under IBA Model Education Loan Scheme for the interest rate. If a student is interested in repaying the amount during the serviced period, he/she is eligible to get an interest concession of 1%.

What is Moratorium Period?

Every student from economically weaker background, qualified for the professional/technical education under the recognized institute/university in India can apply for the Education Loan. There is a moratorium period associated with the loan. It is defined to be twelve months or six months after having the job whichever comes first. This is stated under IBA Education Loan Scheme. After the Moratorium Period the students are liable for paying the interest, in accord of the Education Loan Scheme of the individual Bank on the outstanding loan and it will be adjusted appropriately.

Income Limit and Proof

The students of Economically Weak Sector (EWS) only can enjoy the provision of CSIS. The annual gross income of the candidate’s parents from all the sources should be lesser or equal to Rs. 4.5 lakhs. The students are required to present the Income proof to confirm the Income status certified by authorities under Central and state Government scheme. The present Scheme covers all the EWS students irrespective of the social class.

Competent Authority

The students have to submit the income proof in the Bank, so as to come under the scheme. Therefore, the Ministry of HRD under Central Government recommended to all the State Government authorities to provide the income certificate. The basic criterion is the Income Index not the Social Class. The Banks can get the respective information about the applicant from the District Level Consultative Committees (DLCCs).

MHRD

Who is Eligibility for interest Subsidy?

The eligible student can get the provision of the scheme only once, whether for the undergraduate or for the postgraduate program. If a student under the scheme is discontinuing the course for any reason, or dismissed from the institution under disciplinary or academic action will no longer be eligible to enjoy the scheme. But for the medical reason there are some relaxations for the students, only if they submit the necessary certification required.

List of Technical and Professional courses

Various bank will have easy access to the list of the Technical and professional institutions under the recognized universities from the Ministry of Human Resource Development, published in association with IBA. If any new universities or institutions gave accreditation under UGC/AICTE, the official website of these bodies is required to show the changes immediately. This will help the Banks to refer the information for the smooth execution of the scheme.

For further clarification banks are asked to contact UGC/AICTE, where special cells are formulated for handling the queries.  Also the Government is looking forward to display the certificate of graduates through the official website of each institution to stand against the certificate forgery that can be accessible to various banks.

Similar Schemes

There are some other similar proposals in the Educational Loan Scheme under Central Government. Some example can be, The National Minorities Development and Finance Corporation (NMDFC) which provides loans for individual through the State Channelizing Agencies (SCAs). National Safai Karamcharis Finance and Development Corporation (NSKFDC) and National Backward Classes Finance and Development Corporation (NBCFDC) provide loans to the needy, but the interest amounts are compensated by the Government to theses providers. The Ministry of Social Justice and Empowerment provide education loan under different categories for the students opting for specialized courses after plus two.

Monitoring

All the loan provisions in various banks are monitored under a central mechanism under Ministry of HRD. The systems enable the Government to identify the required changes needed in each field, making new policies, and to respond the loan claims etc. The banks get the subsidy amount from the Government in 6 to 12 months period. The monitoring system of educational loan in the individual level is carried out by giving the students who have taken loan under this scheme an electronic tag or markers on the degree certificates so that the employer identifies the loan liability of the candidate.