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  Central Scheme for Interest Subsidy has been announced by Ministry of HRD for providing interest on Education Loans during moratorium for technical and professional courses for studies in India under the IBA Model Education Loan Scheme for students from Economically Weaker Sections (EWS) with annual gross parental/family income upto Rs. 4.50 lacs per annum from the academic year 2009-10.     
  1.  Applicability of the Scheme  
  The scheme would be applicable only for studies in recognized Technical/Professional courses in India. The interest subsidy shall be linked with the existing Education Loan Scheme of IBA and restricted to students enrolled in recognized Technical/Professional courses (after class XII) in India in Educational institutions established by Acts of Parliament, other institutions recognized by the concerned Statutory Bodies, Indian Institutes of Management (IIMs) and other institutions set up by the Central/State Government.  Under IBA Model Education Loan Scheme for studies in India maximum eligible loan limit is Rs.10 lacs.   
  2.  Moratorium Period  
  The subsidy is provided for the period of moratorium i.e. course period plus one year or six months after getting job whichever is earlier as prescribed under the IBA Model Education Loan Scheme. After the moratorium period is over, the interest on the outstanding loan amount shall be paid by the student in accordance with the provisions of the Education Loan Scheme.  
  3. Criteria for Economically Weaker Section/ Income Limit  
  The benefit of the scheme would be applicable to those students belonging to economically weaker sections with an annual gross parental/family income with upper limit of Rs.4.5 lacs per year (from all sources).    
   4.  Competent Authority to issue income Certificate  
  The Ministry of HRD, Government of India has issued an Advisory to all the State Governments requesting them to designate appropriate authority or authorities who are competent to issue income certificates, based on economic index and not social background for the purpose of this scheme.  Banks shall implement the scheme based on the notification of the certification authority by State Governments communicated through District Level Consultative Committees (DLCCs).  
  5.  Eligibility for Interest Subsidy  
  The interest subsidy under the scheme shall be available to the eligible students only once either for the first undergraduate degree course or the post graduate degree/diploma in India.  Interest subsidy shall however, be admissible for integrated courses (graduate plus postgraduate).

Interest subsidy under this scheme shall not be available for those students once they discontinue the course midstream, or who are expelled from the institutions on disciplinary or academic grounds. However, the interest subsidy will be available only if the discontinuation was due to medical grounds for which necessary documentation to the satisfaction of the Head of educational institution will have to be given.
  6.  Nodal Bank  
  The scheme shall be implemented through Canara Bank, which is the Nodal Bank for the Ministry of Human Resources Development.  
  7.  Applicable Academic Year  
  The scheme shall be applicable from the academic year 2009-10 starting 1st April 2009.  The scheme shall be applicable only in respect of disbursements made by the Banks on or after 1st April, 2009 for the academic year 2009-10, irrespective of date of sanctioning.  In case of loans sanctioned prior to 1.4.2009, for the courses beginning prior to academic year 2009-10, the interest subsidy is available to the extent of disbursements made after 1.4.2009.  
  8.    Disbursement of Interest Subsidy Claims  
  The disbursement of Interest Subsidy Claims to the Banks shall be on half-yearly or yearly basis as advised by Nodal Bank in consultation with the Ministry of HRD.     
  9. Eligible students have to contact the SBOP Branch concerned for any further details along with Income Certificate from the certifying authority.