What is a government education loan in India?

Government education loans in India are financial aids provided by government banks or schemes to help students pursue higher education in India or abroad. They come with lower interest rates and flexible repayment options compared to private loans.

Which government banks offer education loans in India?

Leading government banks like State Bank of India (SBI), Punjab National Bank (PNB), and Canara Bank offer education loans under various schemes, including the Vidya Lakshmi Portal and the Credit Guarantee Fund for Education Loans (CGFEL).

What are the eligibility criteria for a government education loan?

Eligibility usually includes Indian citizenship, confirmed admission to a recognized educational institution, and a strong academic background. Some schemes also have income-based eligibility requirements.

How much loan amount can I get from a government education loan?

Loan amounts vary by bank and course but typically range up to ₹7.5 lakh for studies in India and up to ₹1.5 crore for studies abroad.

Do government education loans cover living expenses and travel costs?

Yes, most government education loans cover tuition fees, examination fees, library charges, travel expenses, and living costs, subject to the loan amount sanctioned.

Is collateral required for government education loans?

For loans up to ₹7.5 lakh, no collateral or third-party guarantee is generally required. However, higher loan amounts may require collateral as per the bank's policy.

What is the interest rate on government education loans?

Interest rates for government education loans are typically between 8% and 10%, depending on the bank and the amount. Government schemes may also provide interest subsidies.

What are the repayment terms for government education loans?

Repayment typically starts 6-12 months after course completion (moratorium period) and can extend up to 15 years, depending on the loan amount and bank policy.

Are there any interest subsidies available for government education loans?

Yes, schemes like the Central Sector Interest Subsidy (CSIS) offer interest subsidies for economically weaker sections during the moratorium period.

How can I apply for a government education loan?

You can apply directly through bank branches, online portals like Vidya Lakshmi, or the Digital India platform for specific schemes.

What documents are required for applying for a government education loan?

Common documents include proof of admission, fee structure, identity proof, address proof, academic records, and income proof of the co-applicant.

Can I get a government education loan for studying abroad?

Yes, government banks provide education loans for international education, covering tuition, living expenses, and travel costs, subject to the course and institution's recognition.

What is the Vidya Lakshmi Portal?

The Vidya Lakshmi Portal is a government-backed online platform where students can apply for education loans, track their applications, and access information about various loan schemes offered by multiple banks.

What happens if I fail to repay the government education loan on time?

Failure to repay may impact your credit score, and the bank can take legal action to recover the amount, especially if collateral is involved.

Can I prepay my government education loan?

Yes, most government banks allow prepayment without additional charges, helping you save on interest.

How does the moratorium period work in government education loans?

The moratorium period allows you to start repayment after completing your course or securing a job, typically lasting 6-12 months.

Are there any special government schemes for female students?

Yes, some government banks offer lower interest rates and special schemes for female students to encourage higher education.

Do government education loans have tax benefits?

Yes, under Section 80E of the Income Tax Act, the interest paid on education loans qualifies for tax deductions without an upper limit.

Can I transfer my education loan from one bank to another?

Loan transfers are possible, subject to the policies of the new bank and the repayment history of the borrower.

What should I do if my loan application is rejected?

If your loan application is rejected, check for the reasons provided by the bank, improve your eligibility (e.g., providing collateral or a co-applicant), or explore alternative government schemes.

How to get an education loan from government in India?

You can apply via your bank under CSIS or through the Vidya Lakshmi and JanSamarth portals.

Does the Indian government provide loans for study abroad?

Yes, through schemes like Dr. Ambedkar Scheme and NBCFDC loans.

What is the maximum loan amount I can get from the government?

Up to Rs 30 lakh for foreign education under NBCFDC.

Do government loans offer interest subsidy?

Yes, several schemes like CSIS and Dr. Ambedkar Scheme provide full interest subsidy during the moratorium.

Are government education loans available without collateral?

Some loans under Vidya Lakshmi and bank-specific schemes offer collateral-free loans up to Rs 7.5 lakh.

Category – Finance

Education Loan by Government: A Complete 2025 Guide for Students in India and Abroad

Updated On:

Feb 19, 2025

Karthik

For most families, the dream of higher education, especially overseas, can feel out of reach because of the steep costs involved. That’s where an education loan by government steps in. Whether you’re a student planning your next move or a parent figuring out the finances, this guide walks you through government loan options, eligibility rules, and how to handle fee transfers abroad using HOP Remit by moneyHOP.

What Is an Education Loan by Government?

Studying in India or abroad can get expensive, no doubt. But there are ways to manage it without putting all the burden on your family. The Indian government actually supports students with loan options that come with fair terms like paying back only after your studies finish, and in many cases, not having to worry about sky-high interest.

Quick Checklist: Are You Eligible for a Government Education Loan?

Use this checklist to quickly determine if you qualify:

Family income under Rs 4.5 lakh for CSIS?

Applying for a professional or technical course?

Planning to study abroad for PG, Ph.D., or higher?

Belong to OBC, EBC, SC, or minority community?

Applied through a recognized bank or official portal?

If you tick any of these, you may be eligible for an education loan by government.

Your Education Loan Journey: What You Know vs. What You Need to Know

Top Government Education Loan Schemes in India

1. Central Sector Interest Subsidy Scheme (CSIS)

Overview: Under the CSIS scheme, students from low-income families who take education loans of up to ₹10 lakh don’t have to worry about paying interest while they study. The government covers the entire interest during the course period and one year after, as long as the loan is taken from a bank following the IBA education loan guidelines.

Eligibility Criteria:

Family income must be less than or equal to Rs 4.5 lakh per annum.

Applicable only for professional or technical courses in India.

The loan must be from a scheduled bank under the IBA scheme.

Benefit: Full interest subsidy during the moratorium period (course duration plus one year).

2. PM-Vidya Lakshmi Scheme

Overview: It’s a single online portal where students can apply for education loans from multiple banks and keep track of their application status, all managed by NSDL.

Key Features:

Apply to multiple banks through a single window.

Loans can be collateral-free, depending on the amount.

Interest subsidy for students from families earning less than Rs 8 lakh annually.

Website: www.vidyalakshmi.co.in

3. Dr. Ambedkar Central Sector Scheme for Overseas Studies

Target Group: Economically backward and OBC students.

Eligibility:

Annual family income must not exceed Rs 8 lakh.

Must be pursuing Masters, M.Phil., or Ph.D. abroad.

Benefit: Full interest subsidy during the moratorium period on loans taken from scheduled banks.

4. NBCFDC Education Loans

Provider: National Backward Classes Finance and Development Corporation.

Loan Amount:

Up to Rs 20 lakh for studies in India.

Up to Rs 30 lakh for studies abroad.

Special Benefits:

Lower interest rates.

Additional concession for girl students.

5. JanSamarth Portal

Overview: An integrated digital platform for applying to government-sponsored credit-linked schemes.

Features:

Digital eligibility check.

Online application and documentation.

Real-time tracking of loan status.

Use Case: Students can explore education loan by government schemes across multiple banks from a single portal.

Comparison of Major Government Education Loan Schemes

Scheme	Max Loan	Interest Subsidy	Target Group	Study Location
CSIS	₹10 lakh	100% (moratorium)	Low-income	India
PM-Vidya Lakshmi	₹7.5 lakh (avg)	Partial/Subsidized	General Public	India/Abroad
Dr. Ambedkar Scheme	₹20–30 lakh	100% (moratorium)	OBC, EBC	Abroad
NBCFDC Loan	₹20–30 lakh	Concessional	Backward Class	India/Abroad

State-Specific Education Loan Initiatives

Jagananna Vidya Deevena (Andhra Pradesh)

In Andhra Pradesh, the Jagananna Vidya Deevena scheme has been a game changer. If your family earns less than Rs 2.5 lakh a year, the government actually covers your entire tuition fee, no hidden conditions. It’s not just a promise on paper either. So far, more than 14 lakh students have already benefited, and the state has put in over Rs 4,000 crore to make sure money doesn’t stop anyone from getting a higher education.

Tamil Nadu Education Loan Scheme

Through the Tamil Nadu Minorities Economic Development Corporation (TAMCO), minority community students with a family income between Rs 1.03 lakh and Rs 6 lakh can apply for subsidized loans. Tamil Nadu also actively implements the CSIS scheme, further increasing accessibility for students.

Real-Time Trends and Statistics (2025)

Metric	Value
Total Outstanding Education Loans	Rs 90,000 crore
Student Coverage via Loans	4 percent
Projected NBFC Education Loan Portfolio	Rs 60,000 crore
Education Loan e-Voucher Scheme (2025 Budget)	3 percent interest for loans up to Rs 10 lakh annually for 1 lakh students

Despite the availability of multiple education loan by government schemes, awareness and accessibility remain areas needing attention.

Challenges in Accessing Government Education Loans

Despite several schemes, challenges persist:

High interest rates from private lenders when government schemes are inaccessible.

Collateral requirements for loans above Rs 7.5 lakh.

Lack of awareness, particularly in rural areas.

Proposed Solutions:

Enhanced outreach programs.

Better integration between portals and banks.

Partnerships with fintech platforms for smoother loan disbursements and remittances.

HOP Remit by moneyHOP: The Smartest Way to Transfer Your Loan Funds Abroad

After securing an education loan by government, you need a reliable way to send tuition fees and living expenses internationally. That is where HOP Remit by moneyHOP becomes a game changer.

Top Reasons to Use HOP Remit:

Zero markups or hidden fees on your transfer.

Live, competitive exchange rates that beat most banks.

No paperwork. 100% app-based experience.

Regulatory-compliant and secure platform.

If you’ve taken an education loan by government and need to pay your university fees or living costs abroad, HOP Remit helps you send the money quickly, without the usual delays or extra charges. It’s simple, fast, and made for students like you.

Why wait in queues or pay extra fees? Make the smartest choice with HOP Remit.

Final Thoughts

Government-backed education loans have helped thousands of Indian students reach premier institutions both in India and internationally. With options like CSIS, PM-Vidya Lakshmi, NBCFDC, and Dr. Ambedkar schemes, there are real solutions available for deserving students.

But availing the loan is just step one. Sending those funds abroad with speed, affordability, and safety is equally important.

That is where HOP Remit by moneyHOP stands out—supporting your global education journey with smart remittance solutions.

Take charge of your future. Apply for the right education loan by government and make your international payments the smart way with HOP Remit.