Higher education can be expensive, but education loans, government subsidies, and new schemes are helping students afford quality learning. Understanding these options can reduce debt burden and make borrowing simpler.
Types of Education Loans in India
Bank Loans: Offered by public and private banks, typically requiring collateral for higher amounts.
NBFC Loans: Private non-banking financial companies provide loans with flexible terms but higher interest rates.
State Government Schemes: Interest subsidies or fully interest-free loans for residents pursuing higher education.
Key State & Central Subsidy Programs
Bihar Student Credit Card (SCC): Fully interest-free loans for all eligible students pursuing higher education.
Central Scheme – Interest Subsidy on Education Loans: Provides interest subsidy for students from economically weaker sections during the moratorium period.
Other State Schemes: Kerala, Tamil Nadu, and several other states offer partial interest subsidies or concessional loans for higher education.
Benefits of State Subsidies & Schemes
Lower Financial Burden: Students repay only principal or reduced interest.
Increased Access: Encourages students from low-income families to pursue professional and technical education.
Flexibility: Many schemes offer easy repayment terms or moratoriums until graduation.
Recent Developments
Several states, including Bihar, are expanding subsidies to cover more courses and students.
Interest-free or low-interest loans are gaining popularity, reducing dependence on high-interest private loans or credit cards.
How to Apply
Check eligibility criteria for state or central schemes.
Approach designated banks or state authorities.
Submit required documents: ID, admission proof, fee structure, and income certificate.
Disbursement usually occurs directly to the educational institution.
Conclusion
Education loans, combined with state subsidies and central schemes, are making higher education more accessible and affordable. Students should explore all options to minimize debt and maximize opportunities for skill development and professional growth.
FAQ
Q1. What is the Student Credit Card (SCC) scheme?
A state-run scheme offering education loans to eligible students, sometimes fully interest-free, to pursue higher education.
Q2. Are there interest subsidies for central education loans?
Yes, the government provides interest subsidies for economically weaker sections during the moratorium period.
Q3. Which students benefit the most from state schemes?
Students from low- and middle-income families seeking professional, technical, or higher education courses.
Q4. Do all education loans require collateral?
Not always. Many state-run loans and loans up to a certain limit (e.g., ₹4–7 lakh) are collateral-free.
Q5. How does an interest-free education loan help students?
It reduces repayment amounts, lowers debt burden, and encourages more students to pursue higher education.
Published on : 17th September
Published by : SMITA
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