Details

The Pradhan Mantri Uchchatar Shiksha Protsahan Yojana: Central Sector Interest Subsidy Scheme was introduced in 2009 by the Ministry of Education, Government of India, formerly known as the Ministry of Human Resource Development. This scheme was designed with the aim of supporting students from economically weaker sections of society in pursuing higher education. It offers a full interest subsidy on education loans taken under the Model Education Loan Scheme of the Indian Banks’ Association (IBA). The subsidy is provided during the moratorium period, which includes the course duration plus one year after completion.

To be eligible, the annual parental income of the student must not exceed ₹4.5 lakhs from all sources. The scheme is strictly applicable to students pursuing professional and technical courses in India. Moreover, these courses must be offered either by institutions accredited by the National Assessment and Accreditation Council (NAAC), or programmes recognized by the National Board of Accreditation (NBA). It also covers studies undertaken at Institutions of National Importance and Centrally Funded Technical Institutions (CFTIs). For effective implementation, Canara Bank has been designated as the Nodal Bank for the scheme.

A comprehensive list of eligible institutions and courses is made available through official portals. Centrally Funded Technical Institutions and Institutions of National Importance can be accessed on the Ministry of Education’s official website. Similarly, the NAAC website provides accreditation status of universities and institutions, while the NBA website lists all accredited professional courses. In cases of uncertainty regarding the eligibility of courses, banks are advised to seek clarifications from statutory bodies such as the University Grants Commission (UGC), the All India Council for Technical Education (AICTE), and other concerned councils. These councils are expected to establish dedicated cells and appoint nodal officers to assist banks in verifying relevant details.

It is the sole responsibility of the loan-disbursing bank to ensure that only eligible professional and technical courses are covered under this scheme. Importantly, the scheme has been adopted by all Scheduled Banks, Regional Rural Banks (RRBs), and Cooperative Banks, and is closely linked with the Model Educational Loan Scheme framed by the Indian Banks’ Association.

The Ministry of Education has entrusted Canara Bank to function as the nodal agency for implementation, monitoring, and coordination of the scheme. All modalities related to its operation are finalized in consultation with Canara Bank, ensuring that the benefits of the scheme reach deserving students across the country.

Benefits

1. Interest Subsidy on Education Loans:

The scheme provides interest subsidy on education loans up to a maximum amount of ₹10 lakhs. Even if the sanctioned loan exceeds ₹10 lakhs, the interest subsidy is limited to ₹10 lakhs only. This ensures that students are supported in a substantial portion of their loan, easing their financial obligations during the study period.

2. No Collateral for Smaller Loans:

For education loans up to ₹7.5 lakhs, no collateral security or third-party guarantee is required. The lending bank is responsible for ensuring that this portion of the loan is covered under the Credit Guarantee Fund Scheme for Education Loans (CGFSEL), facilitating easier access for students who may not have assets or guarantors.

3. Eligible Courses and Institutions:

The interest subsidy is strictly applicable for higher education in professional or technical courses. Eligible institutions include:

a). NAAC-accredited universities and colleges.

b). Professional/technical programmes accredited by the NBA.

c). Institutions of National Importance and Centrally Funded Technical Institutions (CFTIs) in India.

4. Interest Rates:

The interest rates on the education loans are determined according to the Benchmark Prime Lending Rate (BPLR) or the Base Rate of individual banks, following the provisions of the IBA Model Educational Loan Scheme.

Moratorium Period

The moratorium period under this scheme is defined as the course duration plus one year.

During this period, the interest is paid by the Government of India at a simple interest rate, provided the student completes the course successfully.

After the moratorium period, any remaining interest and principal repayment are to be borne by the student, as per the provisions of the Model Educational Loan Scheme of the banks, which may be updated from time to time.

Interest Concession

Under the IBA Scheme, 2021, banks may, at their discretion, offer a 1% interest concession if the interest is serviced during the study period and the moratorium period prior to the commencement of repayment.

However, it is important to note that the government’s subvention for interest should not be treated as a reason to automatically provide the 1% concession on interest rates.

In essence, the PM USS scheme not only reduces the financial burden of education loans for deserving students but also encourages completion of higher education from recognized professional and technical institutions, making quality education more accessible.

Eligibility

1. Type of Education Loan:

The scheme applies only to education loans sanctioned under the IBA Model Education Loan Scheme. Students must ensure that their loan falls within this framework to avail of the interest subsidy.

2. Income Criteria:

The scheme targets students from economically weaker sections, with a gross parental or family income not exceeding ₹4.5 lakhs per annum from all sources. This ensures that the financial assistance is directed to those who need it most.

3. Eligible Courses and Institutions:

a). Students must be enrolled in professional or technical courses.

b). Eligible institutions include:

1. NAAC-accredited universities and colleges.

2. Professional/technical programmes accredited by the NBA.

3. Institutions of National Importance and Centrally Funded Technical Institutions (CFTIs).

c). Courses or institutions not covered under NAAC or NBA accreditation require prior approval from the respective regulatory body.

4. Level of Study:

The subsidy is admissible only once per student, whether for an undergraduate or postgraduate degree. It is also available for integrated courses that combine undergraduate and postgraduate studies.

5. Exclusion of Other Scholarship Recipients:

Students who are already availing any other Central or State Government scholarship or fee reimbursement are not eligible for benefits under this scheme.

6. Course Continuity Requirement:

a). The interest subsidy is not available to students who discontinue their course midstream or are expelled for disciplinary or academic reasons.

b). However, in cases where discontinuation is due to valid medical reasons, the subsidy may be granted, provided the student submits necessary documentation to the satisfaction of the Head of the educational institution.

Application Process

Visit the Official Portal:

To apply for an education loan and simultaneously avail the interest subsidy, students must access the official unified portal of the Department of Higher Education (DoHE) at https://pmvidyalaxmi.co.in/ . This portal serves as a central platform for registration, application tracking, and verification.

Click here for Register

Register with Aadhaar:
Students must register using their Aadhaar number on the portal. This step is essential to link the student’s identity with the scheme and ensure seamless processing of interest subsidy benefits under the PM-USP CSIS Scheme.

Documents Required

1. Identity proof i.e Aadhaar Card
2. PAN Card
3. Income proof (Issued by Competent Authority)
4. Educational Certificates
5. Proof of admission to the course
6. Bank account details
7. Any other documents, as required

Frequently Asked Questions