One: the central subsidy, which most people never claim
The Central Sector Interest Subsidy Scheme is run by the Ministry of Education. For students under the income threshold, it pays the interest that accrues on an education loan during the moratorium period — while you are studying, and for a year after. That is the period when interest quietly compounds and a loan grows before a single repayment is due, which is exactly why covering it matters more than it sounds.
It is claimed through JanSamarth, the national portal that also happens to be a single window onto every bank’s education loan. Most students are told about the loan by a bank and never told about the subsidy by anyone.
Two: your state, which may do more than the centre
State schemes are where the largest amounts sit and where the least information travels. A student in Goa and a student in Uttar Pradesh face completely different arithmetic on the same course.
| Scheme | Run by | What it does |
|---|---|---|
| Bihar Student Credit Card | Government of Bihar | A state-guaranteed education loan for students from Bihar |
| Guruji Student Credit Card | Government of Jharkhand | The same idea, for higher studies in India or abroad |
| Interest-Free Education Loan | Government of Goa | An education loan from the state with no interest at all |
| Abhinandan | Government of Assam | The state subsidises interest on loans taken by its students |
| Dr Ambedkar Interest Subsidy | Ministry of Social Justice | Interest paid for OBC and EBC students studying overseas |
Each of these opens at the department that runs it on our students page. Amounts and deadlines move, which is why they are not printed here.
Three: Section 80E, on whatever is left
This is the one almost nobody claims, because nobody is told. Section 80E of the Income Tax Act deducts education loan interest from taxable income. Not a capped amount. Not a slab. Every rupee of interest paid, deducted in full.
- It runs for eight years from the year repayment starts, or until the interest is fully paid, whichever comes first.
- It covers interest only, never principal.
- It can be claimed by the person actually repaying — so a parent servicing the loan claims it against their own income.
- The loan has to be from a bank or an approved financial or charitable institution, and taken for higher education.
The order to do this in
- Before borrowing, check whether your state runs a scheme. A state-guaranteed or interest-free loan changes the decision entirely.
- Apply for the loan through JanSamarth rather than only at a branch, so the Central Sector Interest Subsidy is assessed at the same time.
- Confirm in writing that the subsidy has been applied. This is the step that fails silently.
- From the first year of repayment, claim Section 80E on the interest, every year, for eight years.
If a claim stalls at any of those steps, it is a grievance with a named office attached to it, not a dead end — see what to do when an application is rejected or ignored.