Dr Ambedkar Central Sector Scheme of Interest Subsidy on Educational Loans for Overseas Studies for Other Backward Classes (OBCs) and Economically Backward Classes (EBCs)
OBC and EBC students going abroad for a Masters, M.Phil, or PhD degree get the full interest on their education loan paid by the Central Government during the moratorium period — so they pay no interest while studying. The scheme covers education loans up to ₹20 lakh taken from a scheduled bank under the IBA Education Loan Scheme. Apply through your nodal bank, which processes claims quarterly through the Ministry of Social Justice.
About This Scheme
OBC and EBC students going abroad for a Masters, M.Phil, or PhD degree get the full interest on their education loan paid by the Central Government during the moratorium period — so they pay no interest while studying. The scheme covers education loans up to ₹20 lakh taken from a scheduled bank under the IBA Education Loan Scheme. Apply through your nodal bank, which processes claims quarterly through the Ministry of Social Justice.
Full official description
"Dr Ambedkar Central Sector Scheme of Interest Subsidy on Educational Loans for Overseas Studies for Other Backward Classes (OBCs) and Economically Backward Classes (EBCs)" is an Education Loan Scheme by the Department of Social Justice and Empowerment, Ministry of Social Justice and Empowerment.
Implementing Agency
The Scheme will be implemented by the Nodal Bank as per the MoU between the Banks and the Ministry of Social Justice & Empowerment.
Scope
The scheme provides interest subsidy to the students belonging to the OBCs and EBCs on the interest payable for the period of the moratorium for the Education Loans for overseas studies to pursue approved courses of studies abroad at Masters, M.Phil. and PhD level.
Objective To award interest subsidies to meritorious students belonging to the Other Backward Classes and Economically Backward Classes to provide them with better opportunities for higher education abroad and enhance their employability.
Benefits
- Full interest on the education loan paid by the Government of India during the moratorium period
- Moratorium covers course duration + 1 year or 6 months after getting a job, whichever is earlier
- Eligible loan amount for interest subsidy: up to ₹20,00,000
- After the moratorium ends, the student is responsible for repaying principal and any further interest
Who Can Apply (Eligibility)
- Must be an OBC (Other Backward Class) or EBC (Economically Backward Class) student
- Must have secured admission in an approved Masters, M.Phil, or PhD program at an institution abroad
- Must have taken an education loan from a scheduled bank under the IBA Education Loan Scheme
- Annual income from all sources must not exceed ₹8,00,000
- At least 50% of scheme funds are reserved for female candidates
How to Apply
Step 1: The interest Subsidy shall be linked with the existing Educational Loan Scheme of the Indian Banks Association (IBA) and restricted to students enrolled for courses at Master, M.Phil and PhD levels. Step 2: The Nodal Bank will lay down the detailed procedure for processing and sanctioning interest subsidies to eligible students in consultation with the Ministry. Step 3: The Recommendatory Committee headed by the Joint Secretary in charge of the Backward Classes Division with representatives of the Finance Division, a representative of Nodal Bank and the concerned Director/Deputy Secretary as convener will examine and recommend the applications for the award of interest subsidy on a quarterly basis.
Frequently Asked Questions
Is there a separate fund allocation for female students under the scheme?
Yes, at least 50% of the total allocation is reserved for female students, but it can be used for male students if there is insufficient demand from female students.
Can the subsidy be provided for courses that are partly in India and partly abroad?
Yes, if the degree is awarded by a foreign university, the course is eligible for interest subsidy.
Can students increase the moratorium period if they have valid reasons?
Yes, with approval from the competent authority, students can extend the moratorium period.
Is there any central authority that monitors the scheme's performance?
Yes, the Ministry of Social Justice and Empowerment monitors the performance of the scheme.
Are candidates from State/UT Lists eligible for the interest subsidy under the scheme?
No, only candidates from the Central List of OBCs are eligible for the interest subsidy.
Is there a mechanism for periodic evaluation of the scheme?
Yes, the financial and physical performance of the scheme is periodically evaluated through studies conducted by reputed institutions/agencies.
Is there any provision for minor modifications or changes in the scheme?
Yes, minor modifications or changes with no financial implications can be made by the Competent Authority.
How is a student's eligibility for the interest subsidy determined if they are employed?
Parental income for eligibility is considered only when the student is unemployed or on sabbatical without receiving a salary.
What happens if the student's income increases or decreases after the loan is sanctioned?
The income certificate submitted during the loan application is treated as proof of annual income, and subsequent changes do not affect eligibility.
Are there any specific disciplines or fields covered under this scheme?
Yes, various disciplines, including Arts/Humanities/Social Sciences, Engineering, Medical, and more are covered. The list of subjects can be amended from time to time.
How can one access the Central List of OBCs to check eligibility?
The Central List (state-wise/UT-wise) of OBCs is available on the National Commission for Backward Classes (NCBC) website (www.ncbc.nic.in).
What is the definition of "meritorious students" under this scheme?
Eritorious students are those who have taken admission in accredited Universities/Institutions abroad, subject to other eligibility and conditions. Priority is given to students who completed their qualifying education in a Government University/Institution before taking admission abroad.
What is the maximum eligible loan component for interest subsidy?
The maximum eligible loan component is the actual loan taken, subject to a maximum of Rs. 20.00 lakh for the purpose of interest subsidy.
Which agency is responsible for implementing this scheme?
The Nodal Bank implements this scheme as per the Memorandum of Understanding (MoU) between the Banks and the Ministry of Social Justice & Empowerment.
Ready to apply?
Visit the official government portal to apply for this scheme.
Apply on myScheme.gov.inDocuments Required
- Passport Sized Photograph
- Aadhaar Number
- Proof of Educational Qualification
- Bonafide Certificate
- For the candidate applying under the OBC category, the OBC Caste certificate in the [prescribed Performa](https://socialjustice.gov.in/writereaddata/UploadFile/Guidelines%20ISEL%20Scheme%20(wef%2001%20Oct%202017).pdf) issued by the competent authority.1. Income certificate produced by the student for availing Educational Loan viz. ITR/Form 16/Audited Accounts/Income certificate issued by the authority of the State Government/UT Administration.
- Details of the Aadhaar-linked Bank Account.