Studying abroad can be a great opportunity, but it also comes with many challenges, including funding. Not everyone has the financial means to support their education overseas. However, education loans can help make this process more accessible. 

The Indian government provides subsidies and education loans for economically disadvantaged students to help them pursue higher education in top study-abroad destinations like the USA, Germany, and the UK, among others. This makes studying abroad a more viable option for students who may not have the financial means to do so otherwise.

To study abroad, it is important to have a clear understanding of the financial resources available. The Indian government offers multiple schemes to help students finance their education abroad. If you are planning to pursue higher education in a foreign country, there are 5 government education loan schemes that can help make your goals a reality.

5 best Government Education Loan Scheme

Numerous loan programs offered by the Indian government are well-known for their cheap interest rates and simple application processes. Let's briefly go over the major loan choices available to students who want to pursue an international education.

Gujarat Government Education Loan

The Gujarat Government Education Loan for Studying Abroad is a loan program offered by the Government of Gujarat, India, to provide financial assistance to students from the state who wish to pursue higher education abroad. The loan is intended to cover the cost of tuition, accommodation, and other expenses related to studying abroad.

The loan amount can vary depending on the cost of the course, accommodation, and other expenses, but it is generally capped at INR 20 Lakhs. The loan has to be repaid within a period of 15 years after completion of the course or within 6 months after obtaining the job.

In addition to the loan, the government also provides a subsidy of up to INR 15 Lakhs to students from the Economically and Socially Backward Classes (ESBC) category.

Eligibility Criteria

• The student should be a permanent resident of Gujarat.
• Should have secured admission to a recognized institution abroad.
• Should have a co-applicant who is a parent or guardian.
• The student should have also secured admission to a course that is approved by the Gujarat Government.

Vidya Laxman Education Loan

Vidya Lakshmi Education Loan is a centralized education loan scheme launched by the Government of India to assist students in obtaining financial assistance for higher education. The scheme provides financial assistance for various educational expenses such as tuition fees, hostel fees, purchase of books, equipment, and other expenses.

The loan is available for students pursuing undergraduate, postgraduate, and doctoral programs in India or abroad. The loan amount for study abroad programs is capped at INR 30 Lakhs. The repayment of the loan starts after the completion of the course or six months after the student lands a job, whichever is earlier. The repayment period is generally 15 years after the commencement of repayment.

In addition to the loan, the government also provides a subsidy of up to INR 15 Lakhs to students from the Economically and Socially Backward Classes (ESBC) category.

Eligibility Criteria

• The student should have secured admission to an approved course and institution.
• Should have a co-applicant who is a parent or guardian.
• Should not have any outstanding education loans.
• Candidates must have earned their class 12 diploma from an accredited board of studies. It ought to be a full-time academic course.

National Backward Classes Finance and Development Corporation (NBCFDC) 

The National Backward Classes Finance and Development Corporation (NBCFDC) is a government organization that provides financial assistance to students from backward classes living below the poverty line for pursuing higher education. The organization offers education loans for general, professional, and technical courses or training at graduate and higher levels.

The loan is available for students pursuing higher education in India or abroad, and the loan amount for study abroad programs is capped at INR 20 Lakhs.

The repayment of the loan starts five years after the completion of the course or after the student lands a job, whichever is earlier. The repayment period is generally 15 years after the commencement of repayment.

Eligibility Criteria

• Students from the lower social classes must present their caste certificates.
• Less than 3.30 lakhs should be the annual household income.
• Students are required to display their letters of acceptance from a foreign university or college.
• Must have received a grade of at least 70% in high school from an accredited board of studies.

Padho Pardesh Scheme

It is a government education loan scheme for Indian students who are enrolled in a postgraduate degree program overseas. The scheme is administered by the Ministry of Minority Affairs and is available through Canara Bank. The scheme is intended to provide financial assistance to students from minority communities who wish to pursue higher education abroad.

Under the scheme, students can avail of a 100% subsidy on the loan and the loan amount is capped at INR 20 Lakhs. Eligibility criteria for the loan include that the student should be from a minority community, should have a good academic record, and should have secured admission to an approved course and institution.

The moratorium period for the loan is during the course period, plus either one year post the completion of the course or six months after getting a job, whichever comes first. The repayment period is generally 15 years after the commencement of repayment.

Eligibility Criteria

• Only students with a minimum grade point average of 60% in class 12 are eligible for the Padho Pardesh program.
• must possess confirmation of admission from a foreign college or university
• They can take use of this program in the first year rather than halfway through the program.
• The family's combined average gross income cannot be higher than 6 lakhs.
• It applies to students who want to enroll in master's, MPhil, and doctoral programs.
• Students who apply under this program must have the necessary documentation; otherwise, their registration will not be completed.

Dr. Ambedkar Central Sector Scheme

The Ministry of Social Justice & Empowerment in India administers the Dr. Ambedkar Central Sector Scheme. The program's objective is to encourage minority populations in India to study abroad by offering 100%-subsidized education loans to students who are less fortunate financially. This program is only available to students enrolled in Master's, MPhil, or Ph.D. programs and can only be used once. 

For instance, if a student utilizes this program for a Master's program, they cannot use it again for a Doctorate program. The loan must be repaid one year after the course is finished or six months after the student finds employment, whichever comes first.

Eligibility Criteria

• For OBC and ST groups, students applying for this program must be Indian citizens and have a caste certificate.
• High school kids are not qualified for this program because it is only relevant to those who have completed higher degrees of study, such as PG, MPhil, and Ph.D.
• Students can only apply for this program if their family's average annual gross income is less than 3 lakh rupees.
• Candidates cannot apply for the program in the middle of the course; instead, they must do so prior to the course's start date.