How to claim education loan interest waiver in India under CSIS

Students coming from economically weak backgrounds can take the help of MHRD's CSIS scheme for attractive interest subsidies on their education loan. Find out more about the government's scheme, which is available for education in professional and technical courses in India.

Students who come from economically weaker sections (EWS) can enjoy some respite from the cost of education with a little help from the government. The MHRD (Ministry of Human Resource Development) offers a scheme called the Central Scheme to provide Interest Subsidy (CSIS) on Education Loan. The CSIS subsidy program has been offered to students since the 2009-2010 academic year.

About the CSIS Scheme

This scheme eases the burden of interest that eligible students have to pay on their loan throughout the period of moratorium. In other words, students enjoy fully subsidised interest rates during the time they are studying, plus one year after graduation or six months after getting a job, whichever comes earlier.

The CSIS scheme is available only to students who study professional courses or technical courses from Indian institutes, recognised by Central and State Governments.

Here are some of the other features of the scheme that you should know about:
  • Eligible students are those who come from EWS, with a household income from all sources totalling up to 4.5 lakh per year
  • The subsidy is applicable to students who sign up for recognised technical or professional courses after class XII. Not all courses make you eligible for the subsidy. Programs have to be from institutes that have been set up by the Central or State governments, the IIMs, or other institutes that are recognised by Statutory Bodies
  • The maximum subsidy you can claim will be based on a course fee of 10 lakhs. In other words, if your total course fee (and your loan) crosses 10 lakhs, the subsidy will only apply to the 10 lakhs
  • When you apply for an education loan, and if you are eligible for the CSIS, your bank will link the subsidy scheme with your Education Loan Scheme. Usually, the banks are supposed to claim the amount from the MHRD, via a Nodal Bank (which is Canara Bank in this case)

Other things to note

In order to claim the subsidy, the student needs to present an Income Certificate to the branch from where he or she is borrowing. Many students fail to do this, and banks often neglect to tell students, which is a good reason to be extra alert.

You can consult your bank about the income certificate issuing authorities in your state. The bank will carry out the rest of the procedure, including informing Canara Bank (and therefore MHRD) and obtaining the balance owed to them.

Note that you can claim the subsidy either for your first undergraduate degree or a postgraduate degree or diploma, but not both. But if your course is an integrated graduate and postgraduate course, then the subsidy will also apply.

If you quit your course in the middle or are expelled, the subsidy will not be renewed when you join another course. But there is a concession for students who are forced to leave their program on medical grounds.

Always make sure to follow up on the claims submissions by your bank to the nodal bank. Very often, lackadaisical bank branches can fail to send their claims. Canara Bank has made it easier to lodge these claims by making the process online-only. You can create an account with Canara Bank on the Interest Subsidy Scheme on Education Loan page and keep track of your loan subsidy.

The CSIS can mean valuable savings for a deserving student. But in case there are problems in the subsidy process, students can send complaints to the Chairman of the bank and the Reserve Bank of India.

There are of course both public sector and private sector banks offering education loans. All banks comply with the CSIS scheme launched by the MHRD.

Take a look at some of the education loan schemes offered by different banks:

Also, find answers to questions regarding education loans.

Article by Juana
Juana is a freelance writer, with years of experience, creating content for varied online portals. She holds a degree in English Literature and has worked as a teacher and as a soft skill trainer. An avid reader, she writes on a variety of topics ranging from health, travel, education and personality development.

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