PM-USP Central Sector Interest Subsidy Scheme (CSIS)

Scheme Introduction: A Brief Overview

The cost of professional and technical education can be a major financial burden for students from economically weaker families. To reduce this burden, the PM-USP Central Sector Interest Subsidy Scheme (CSIS) provides interest support on eligible education loans. Under the scheme, eligible students receive a 100% interest subsidy on education loans up to ₹10 lakh during the moratorium period. If the sanctioned loan exceeds ₹10 lakh, the subsidy is calculated only on the eligible loan amount of ₹10 lakh.

The scheme is part of the Pradhan Mantri Uchchatar Shiksha Protsahan (PM-USP) Yojana and is administered by the Department of Higher Education, Ministry of Education, Government of India. It supports students from economically weaker families who take eligible education loans for approved professional or technical courses in India.

To qualify, the student's annual family income must generally be within the prescribed limit of ₹4.5 lakh. The education loan, course, and institution must also satisfy the scheme's eligibility conditions. Interest subsidy is available for professional or technical courses offered by eligible institutions, including NAAC-accredited institutions, NBA-accredited professional or technical programmes, Institutions of National Importance, and Centrally Funded Technical Institutions (CFTIs) in India.

The moratorium period generally covers the course duration plus one year. During this period, the Government of India bears the eligible interest at a simple rate of interest, provided the student successfully completes the course. After the moratorium ends, the student must pay the interest on the outstanding loan amount according to the applicable provisions of the bank's Model Educational Loan Scheme.

The interest rate on the education loan is determined by the lending bank according to its applicable Benchmark Prime Lending Rate (BPLR), Base Rate, or other prescribed lending-rate framework under the Indian Banks' Association (IBA) Model Educational Loan Scheme.

Under the scheme, education loans of up to ₹7.5 lakh do not require collateral security or a third-party guarantee, subject to applicable conditions. The lending bank must ensure that the eligible loan amount is covered under the Credit Guarantee Fund Scheme for Education Loans (CGFSEL).

Students generally do not need to submit a separate application for the interest subsidy. The bank sanctioning and disbursing the education loan checks the student's eligibility and submits the subsidy claim through the prescribed process. Students must provide the required income, admission, course, and loan-related documents to the bank.

The scheme is available through participating scheduled banks, Regional Rural Banks (RRBs), and cooperative banks. It is linked to the Model Educational Loan Scheme of the Indian Banks' Association. Canara Bank continues to serve as the nodal bank for the Ministry of Education, and the implementation and monitoring procedures are finalized in consultation with it.

Under the IBA Model Educational Loan Scheme, 2021, banks may, at their discretion, offer a separate 1% interest concession if the borrower pays interest during the study period and the subsequent moratorium period before repayment begins. However, the government-provided interest subsidy should not be used as a reason to grant this concession. Students should confirm the applicable terms with their lending bank.

Overall, the PM-USP Central Sector Interest Subsidy Scheme helps eligible students pursue approved higher education by reducing their education loan interest burden during the moratorium period. It makes higher education more affordable and supports students who may otherwise struggle to finance their studies.

Students who are looking for a direct scholarship instead of education-loan support can read about PM-USP CSSS. Students from Jammu & Kashmir and Ladakh can also check the PM-USP SSSJKL component.

Scheme Benefits

The main purpose of CSIS is to reduce the interest burden on eligible students while they are studying. The key benefits include:

• Eligible students can get 100% interest subsidy on their eligible education loan during the moratorium period.
• Interest subsidy is available on eligible education loans up to ₹10 lakh.
• If the eligible education loan is more than ₹10 lakh, the subsidy is calculated only up to the prescribed ₹10 lakh limit.
• The moratorium period generally covers the course period plus one year.
• The scheme reduces the financial pressure on students during their studies and the additional one-year moratorium period.
• Eligible education loans up to ₹7.5 lakh can also receive credit-guarantee support under the applicable CGFSEL framework, subject to the scheme and bank conditions.

After the moratorium period ends, the student becomes responsible for repayment of the education loan and the applicable interest according to the terms agreed with the bank.

CSIS Interest Subsidy Limit

The interest subsidy under CSIS is linked to the eligible education loan amount. The subsidy is available up to ₹10 lakh, even if the sanctioned education loan is higher.

Eligibility Requirements

CSIS is meant for students who need education loans for eligible technical or professional education. Before relying on the interest subsidy, students should check all of the following conditions:

• The student must belong to a family with annual income of up to ₹4.5 lakh.
• The student must be pursuing an eligible technical or professional course.
• The course must be offered by an institution or programme covered under the applicable CSIS guidelines.
• The education loan must be sanctioned by a participating bank under the applicable education-loan framework.
• The student must meet the conditions prescribed by the CSIS guidelines and the lending bank.
• Interest subsidy is available only for the eligible loan amount and period covered under the scheme.
• The student must provide the required income and education-related information to the bank for checking eligibility.

Eligible Courses and Institutions

CSIS is not available for every type of course. The scheme mainly covers eligible technical and professional courses offered by institutions or programmes that meet the prescribed accreditation or recognition requirements.

• Eligible technical and professional courses are covered subject to the applicable scheme guidelines.
• The institution or programme must meet the required recognition or accreditation conditions.
• Institutions such as Institutions of National Importance and Central Funded Technical Institutions may be covered where they meet the applicable conditions.
• Students should confirm the eligibility of their particular course and institution with the lending bank before taking the loan.

Required Documents

The exact documents can vary depending on the bank and the student's course. Students should keep the following basic information ready when applying for an education loan:

• Aadhaar or another valid identity document.
• Proof of address.
• Class XII marksheet or qualifying examination certificate.
• Admission letter or proof of admission to the eligible course.
• Course fee structure or fee demand letter from the institution.
• Family income certificate showing that the annual income is within the prescribed limit.
• Bank account details.
• Any additional documents requested by the lending bank.

Steps to Apply

CSIS works differently from a regular scholarship. Students do not normally fill out a separate CSIS scholarship form. The interest subsidy is connected with the eligible education loan and is claimed by the bank after checking the student's eligibility.

• First, select an eligible technical or professional course and confirm that the institution meets the conditions applicable under CSIS.
• Apply for an education loan through a participating bank. Students can also use the PM-Vidyalaxmi portal to apply for an education loan through its digital application process.
• Enter your personal, course, admission and family-income details in the loan application.
• Submit the required documents to the bank or upload them through the applicable digital process.
• Tell the bank that you want to be considered for the applicable government interest-subsidy benefit and provide the required income and course information.
• The bank checks the education loan and the student's eligibility under the applicable CSIS conditions.
• If the student is eligible, the bank submits the interest subsidy claim through the prescribed process. The student does not normally need to submit a separate CSIS subsidy claim.
• Keep checking the loan account and bank communication to confirm that the eligible interest subsidy has been processed.

Moratorium Period Under CSIS

The moratorium period is an important part of CSIS because the 100% interest subsidy applies during this period. It generally covers the duration of the course plus one year.

During this period, the eligible interest on the covered education loan is supported under the scheme. Once the moratorium ends, the student has to repay the loan according to the repayment schedule and applicable terms of the bank.

Difference Between CSIS, PM-Vidyalaxmi and CGFSEL

CSIS, PM-Vidyalaxmi and CGFSEL are connected education-support measures, but they provide different types of assistance. Students should understand the difference before applying.

PM-USP Central Sector Interest Subsidy Scheme (CSIS)

CSIS provides full interest subsidy to eligible students whose annual family income is generally up to ₹4.5 lakh and who pursue qualifying technical or professional courses in eligible institutions. The subsidy applies to eligible interest on education loans up to ₹10 lakh during the moratorium period.

PM-Vidyalaxmi

PM-Vidyalaxmi is a unified digital portal through which students can apply for education loans from participating banks. The portal also provides a facility for eligible students to apply for applicable interest-subvention benefits. Under its separate provisions, eligible students may receive 3% interest subvention on qualifying loans, subject to the prescribed income, institution and other conditions.

Credit Guarantee Fund Scheme for Education Loans (CGFSEL)

CGFSEL is different from an interest-subsidy scheme. It provides credit-guarantee support to the lending institution for eligible education loans. The guarantee helps banks extend education loans by covering a prescribed portion of the eligible outstanding default. It does not cancel the student's loan or remove the student's responsibility to repay it.

Relevant Links

• Ministry of Education, Government of India
• PM-Vidyalaxmi Portal
• PM-Vidyalaxmi About Scheme
• PM-Vidyalaxmi FAQs
• Main PM-USP Yojana Page
• PM-USP CSSS Scholarship
• PM-USP Central Sector Interest Subsidy Scheme (CSIS) Guidelines
• PM-USP Central Sector Interest Subsidy Scheme (CSIS) Update

Contact Information

For CSIS-related questions, students should first contact the bank that sanctioned and disbursed the education loan, as the bank handles the interest subsidy claim under the prescribed process. For issues related to the digital education-loan application, students can contact the PM-Vidyalaxmi support team.

PM-Vidyalaxmi Support

• Toll-Free: 1800-1031
• Email: [email protected]
• Address: Canara Bank Head Office (Annex) Ground Floor, Scope Minar Near Nirman Vihar Metro Station Laxmi Nagar, New Delhi - 110092

For broader PM-USP or Ministry-related queries, students can also refer to the Ministry of Education and the official CSIS guidelines.