While there is no education loan program designed exclusively for rural areas, several government-backed schemes extend significant benefits to students from economically weaker families, including those living in villages. These initiatives aim to remove financial barriers to higher education by offering interest subsidies, credit guarantees, and simplified application processes.

Major Government Education Loan Schemes

 1. Central Sector Interest Subsidy (CSIS) Scheme

* Purpose: To support students from economically weaker sections (EWS) pursuing professional or technical courses in India.

* Eligibility: Annual family income up to ₹4.5 lakh.

* Benefits: The government bears the entire interest during the moratorium period (course duration + one year).

* Loan Amount: Subsidy available on loans up to ₹10 lakh.

* Collateral: No collateral needed for loans up to ₹7.5 lakh, as these are covered under the Credit Guarantee Fund Scheme for Education Loan (CGFSEL).

 

 2. Pradhan Mantri Vidyalakshmi (PM-Vidyalakshmi) Scheme

* **Purpose:** A centralized online portal providing a single-window system to apply for and track education loans across banks and schemes.

* **Benefits:**

  * For families with annual income up to ₹8 lakh, a 3% interest subvention is provided on loans up to ₹10 lakh during the moratorium period.

  * Offers collateral-free and guarantor-free loans for meritorious students in top-tier institutions.

  * **Rural Preference:** Students who completed higher secondary schooling from rural schools receive preference in the selection process for interest subvention.

 

3. NSFDC Education Loan Scheme (for SC Students)

* Purpose: Specifically for Scheduled Caste (SC) students.

* Eligibility: Annual family income up to ₹3 lakh, applicable to both rural and urban households.

* Benefits:

  * Concessional interest rates.

  * Loan amounts up to ₹30 lakh for studies in India.

  * Disbursed through State Channelizing Agencies (SCAs).

NABARD’s Role

The National Bank for Agriculture and Rural Development (NABARD) plays a facilitative role by guiding banks on rural education credit opportunities. NABARD also spreads awareness of government schemes among rural households and supports the participation of commercial and regional rural banks in extending education loans.

How Rural Students Can Apply

1. Register on the Vidya Lakshmi Portal: The centralized platform to access government-supported education loan schemes.

2. Fill the Common Education Loan Application Form (CELAF):  A single form to apply across multiple banks and schemes.

3. Submit Applications: Students can approach participating banks, including Regional Rural Banks, which cater to rural areas.

4. Provide Income Certificate: Essential for verifying eligibility under schemes such as CSIS and PM-Vidyalakshmi.

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