India Government has decided to offer interest free education loans for all students admitted for undergraduate and the 5-year integrated degree programs in IITs, covering the period of the study plus one year of moratorium under the Vidyalaxmi Scheme.
The following are the conditions:
# The facility shall be made available to all the students whose household income does not exceed Rs 9 lakh per annum.
# The education loan, for this purpose, shall cover only the tuition fee payable by the student as per his eligibility. The portion of the tuition fee paid by the student from his own sources at the time of securing admission could be reimbursed from the overall loan.
# The terms of the loan shall be in accordance with the broad contours of the Educational loan Scheme of the Indian Banks’ Association (IBA) for pursuing Technical/Professional Education studies in India.
# The term of the loans sanctioned under this dispensation shall be 10 years.
# There shall be no collateral for sanction of the loan except the personal guarantee of the student (applicant) and the parent/guardian (co-applicant).
# The subvention of interest (on equated basis) shall be applicable for a maximum period of 5 years (which may include a one year moratorium).
# After the expiry of the above period, the interest on the outstanding loan amount shall be paid by the student, in accordance with the provisions of the existing educational loan scheme of the Banks and as may be amended from time to time.
# This facility is applicable only to the loans taken by the students who secured admission into the undergraduate courses of IITs (including the integrated courses) starting from the academic year 2016-17.
# The interest subvention is subject to the satisfactory performance of the student in the institution.
# Payment of the interest subvention shall be from the internal accruals of the IIT.
However a Central Sector Scheme to provide interest subsidy on educational loan (CSSIS) is presently operational which provides full interest subsidy during the period of moratorium (course period + one year) on loans taken by students belonging to EWS from Scheduled banks under the Model Educational loan Scheme of the IBA for pursuing any of the approved courses of studies in technical & professional streams, from recognized institutes in India.