Education Loan : Clarifications On Education Loan Interest Subsidy Scheme

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Education Loan
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Clarifications On Education Loan Interest Subsidy
Scheme
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• ELTF has been getting lot of enquirers from
  different part of country seeking clarifications
  on 'Interest Subsidy Scheme'.
• There are two types of Interest Subsidy scheme
  for students pursuing education in India.
• 1. First Scheme For Loans granted / disbursed
  on or after 1st April 2009
• 2. Second Scheme For Loans granted / disbursed
  prior to 1st April 2009

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For Loans granted prior to 1.4.2009

• In Feb 2014, Shri P Chidambaram (then Finance
  Minister) announced in the Parliament that
  Government would reimburse 100 of the interest
  outstanding as on 31.12.2013.
• In this scheme, the students who availed loan
  prior to 1.4.2009 and who paid the interest
  regularly, were in a disadvantageous position.
• Since interest component was either nil or
  negligible, they did not get any benefit of the
  interest subsidy. Similarly the students who
  closed the education loan account before
  31.12.2013 were also not eligible to get interest
  subsidy.
• Now this scheme is closed. Now the students
  cannot claim any interest subsidy under this
  scheme. We are writing this only for
  information.

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For Loans granted / disbursed on or after
1.4.2009

• Government of India (Ministry of HRD) provides
  100 interest subsidy for the eligible students
  (as given earlier) for all the loans disbursed on
  or after 1.4.2009 during the moratorium period.
• If a loan has been sanctioned in 2007 for Rs.4
  lakhs, to be disbursed _at_ Rs. 1 lakh every year,
  the student is eligible for interest subsidy for
  the disbursements made in 2009 (if it is after
  1.4.2009) and 2010.
• Moratorium period is the study period one year
  of six months after getting employment whichever
  is earlier.
• Interest subsidy is available for either Under
  Graduation or Post Graduation. From the same
  family, brothers and sisters can avail the
  subsidy individually.
• Students can avail the subsidy under only one
  scheme. Students who availed subsidy under the
  second scheme (loans prior to 1.4.2009) are not
  eligible for subsidy under the first scheme.

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Problems faced by students

• The students were required to submit the Income
  Certificate to the Bank to claim interest
  subsidy. Since the Banks did not intimate many
  of the students in the early years, many eligible
  students did not get interest subsidy.
• It is the duty of the Banks to identify the
  eligible students and advise them to get the
  income certificate. Also, it is the duty of the
  Bank to submit the claim through the Nodal Bank
  portal to the Government of India within the time
  stipulated by the Government. Due to the fault
  of many of the Branches, claims were not
  submitted in the past claiming interest subsidy
  by the Banks.
• Even the students who got subsidy, received only
  a small portion of the interest debited by the
  Bank. In many cases, Banks failed to submit the
  claim for few years. For example, banks might
  not have claimed for 2009-10, but claimed for
  other years. Also, they might have claimed for
  2009-10, 2010-11, but might not have claimed for
  other eligible years during the moratorium
  period.
• ELTF has been taking up this issue through
  supporting MPs in the Parliament and with the
  Government for the past three years.

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Government of India opens the portal as one time
measure

• In order to resolve the confusion of the past
  disbursement of Interest Subsidy, the Government
  of India (MHRD).
• Accordingly, all the pending claims, unclaimed
  interest subsidy for the period from 2009-10 to
  2013-14 can now be claimed by the Banks. Though
  the portal was supposed to have been opened on
  1st Sep 2015, due to some technical reasons, it
  is likely to be opened next week.

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What students can do

• If you have any education loan disbursement on or
  after 1.4.2009 (irrespective of your date of
  sanction say 2008 or 2007) and if you are
  eligible for interest subsidy as given in the
  early paras, then check your statement of account
  and also through the link given above for the
  subsidy claimed by the Bank.
• Please compare the actual interest debited by the
  Bank during that Financial Year with the interest
  credited or not credited.
• If the students find that either interest subsidy
  for that year has not been claimed or shortly
  credited, please write a letter giving the
  complete details and hand over to the Manager.
  Please request the Manager to claim the interest
  subsidy, when the portal opens.

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• ELTF will not follow up individual cases. If the
  students find any difficulty, they have to send
  complaint to Chairman of the Bank and to Reserve
  Bank of India. Please do not write to ELTF for
  individual issues. They can personally meet the
  Regional Managers and sort out the issues.
• Source http//www.eltf.in/2015/09/clarifications
  -on-education-loan.html

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