PM Uchchatar Shiksha Protsahan: Interest Subsidy for Students

Overview

The Pradhan Mantri Uchchatar Shiksha Protsahan (PM-USP) Yojana provides interest subsidy on education loans to students from economically weaker sections. Under this central scheme, the government pays the interest on education loans during the moratorium period (course duration plus one year).

The scheme is implemented through scheduled banks and is managed by the Department of Higher Education, Ministry of Education.

Objective

The scheme aims to make higher education accessible for students from low-income families. By eliminating the interest burden during the study period, it prevents students from taking on heavy debt before they even start earning.

Benefits

• Full interest subsidy during the moratorium period (course duration plus one year or six months after getting a job, whichever is earlier)
• Applicable for technical and professional courses in India
• No cap on course fees under some categories
• Benefit applies to loans taken from scheduled banks under the IBA model education loan scheme

Eligibility

• Parental income must not exceed Rs 4.5 lakh per annum
• Must have taken an education loan from a scheduled bank for approved technical or professional courses
• Must be enrolled in a recognized institution in India
• Eligible for undergraduate and postgraduate courses

Exclusions

• Students whose family income exceeds Rs 4.5 lakh annually are not eligible
• Loans for courses abroad are not covered
• Students who have discontinued their course are not eligible
• Those who have already availed subsidy through another education loan subsidy scheme may not qualify

Application Process

1. Apply for an education loan at your bank and request the interest subsidy benefit
2. The bank verifies income and course eligibility
3. Bank submits details to the Canara Bank portal (the nodal bank for this scheme)
4. The subsidy is credited during the moratorium period automatically

Documents Required

• Proof of admission to a recognized institution
• Income certificate of parents (not exceeding Rs 4.5 lakh annually)
• Aadhaar card of the student
• Loan sanction letter from the bank
• Fee structure of the course