Dr Ambedkar Central Sector Scheme

What is the Dr Ambedkar Central Sector Scheme?

The Dr Ambedkar Central Sector Scheme pays the full interest on an education loan taken for overseas study. It covers OBC and EBC students pursuing Master's, MPhil, or PhD courses abroad, on loans up to ₹20 lakh. Half the scheme funds are reserved for female candidates. Canara Bank processes all claims as the nodal bank.

Key Features of Dr Ambedkar Central Sector Scheme

The table below sets out the scheme parameters.

The 50% female reservation is the feature that sets this scheme apart from the other central subsidy schemes. Neither CSIS nor PM-Vidyalaxmi carries an equivalent provision.

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Eligibility Criteria

Eligibility depends on the student's category, income, course, institution and education loan.

• The applicant must qualify under either the OBC or EBC category prescribed by the scheme.
• OBC applicants must meet the prevailing OBC creamy-layer income criterion and submit the prescribed OBC certificate issued by the competent authority.
• EBC applicants must satisfy the scheme's EBC definition and applicable annual income ceiling of ₹5 lakh.
• The student must have secured admission to an approved Master's, MPhil or PhD programme leading to a qualification from an accredited university or institution abroad.
• The education loan must be obtained from a scheduled bank under the applicable IBA Education Loan Scheme.
• The interest-subsidy benefit can generally be availed only once under the scheme.
• Students who discontinue their course midway or are expelled on academic or disciplinary grounds are generally not eligible to continue receiving the subsidy. Applicable exceptions may exist for documented medical reasons in accordance with the scheme rules.
• A beneficiary who gives up Indian citizenship during the loan tenure loses eligibility for the interest subsidy.
• Applicants must satisfy the income-documentation requirements prescribed under the scheme.

For OBC applicants, the income ceiling follows the prevailing creamy-layer criterion, which currently stands at ₹8 lakh per year. For EBC applicants, the annual income ceiling is ₹5 lakh.

The applicable income may depend on the applicant's circumstances. Scheme material distinguishes between employed applicants and applicants who are unemployed or otherwise dependent on their parents or guardians.

Students who do not belong to OBC may still potentially qualify under the EBC category if they satisfy the scheme's EBC definition, income limit and other conditions.

Students outside the OBC and EBC categories have no equivalent central scheme for overseas study. Many build a corpus in advance through a mutual fund child plan to reduce the amount to be borrowed.

Courses and Institutions Covered

The scheme is narrower than most applicants expect. Only three course levels qualify: 

• Master's
• MPhil 
• PhD

The student must secure admission to an accredited university or institution abroad for an eligible course. The scheme is intended for eligible higher studies leading to a qualification from an accredited foreign university/institution. A programme undertaken partly in India and partly abroad may also qualify where the degree is awarded by the foreign university, subject to the scheme conditions.

How to Apply

The process runs through the lending bank, with Canara Bank processing claims as the nodal bank.

• Secure admission: Obtain confirmed admission to a recognised overseas institution for an eligible Master's, MPhil or PhD programme.
• Applicants must apply for the education loan: Go to a particular bank and make sure that the loan is arranged according to the IBA Model Education Loan Scheme.
• Submit category and income documents: Provide the documents required to establish OBC/EBC status and applicable income eligibility. 
• Declare the subsidy claim: State the intention to claim under the scheme at the time of the loan application. The subsidy is not applied automatically.
• Bank forwards the claim: The lending bank submits the claim to Canara Bank, which processes and disburses the subsidy on behalf of the ministry.

Documents Required

Exact documentation may vary according to the lending bank and applicant profile. 

• OBC caste certificate in the prescribed format, when applying under OBC
• Applicable income proof for OBC/EBC eligibility
• Admission proof for the approved foreign course/institution
• Education loan documentation required by the scheduled bank
• Other KYC/academic documentation required by the lending bank

Conclusion

The Dr Ambedkar Central Sector Scheme is an interest-subsidy programme for eligible OBC and EBC students pursuing approved Master's, MPhil and PhD studies leading to qualifications from accredited foreign universities or institutions. The subsidy covers interest alone, not the principal. Investments such as child education plans, mutual funds and other conservative investments may also prove to be useful when planning ahead.