PM USP Central Sector Interest Subsidy Scheme 2026 – The Government of India has launched the PM USP Central Sector Interest Subsidy Scheme to help students from economically weaker families pursue higher education without financial burden. Under this scheme, eligible students can get a full interest subsidy during the moratorium period on education loans taken for professional and technical courses in India.
The scheme was introduced by the Ministry of Education under the Pradhan Mantri Uchchatar Shiksha Protsahan Yojana. It supports students whose annual family income is up to ₹4.5 lakh. The subsidy is available for education loans taken under the Indian Banks’ Association (IBA) Model Education Loan Scheme.
What is PM USP Central Sector Interest Subsidy Scheme 2026 ?
- The PM USP Central Sector Interest Subsidy Scheme provides full interest subsidy on education loans during the study period and one year after completion of the course.
- The scheme is specially designed for students belonging to Economically Weaker Sections (EWS). Students pursuing technical or professional courses from approved institutions can receive this benefit.
- The subsidy amount is directly managed through the Government of India and implemented through Canara Bank, which acts as the nodal bank.
Key Benefits of PM USP Central Sector Interest Subsidy Scheme
1. Full Interest Subsidy
The Government pays the full interest during the moratorium period.
2. Loan Benefit up to ₹10 Lakh
Interest subsidy is available on education loans up to ₹10 lakh.
3. No Collateral up to ₹7.5 Lakh
No collateral security or third-party guarantee is required for loans up to ₹7.5 lakh.
4. Professional & Technical Courses Covered
The scheme supports higher education in approved professional and technical courses.
5. Financial Relief for Students
Students can complete studies without worrying about immediate interest repayment.
Eligibility Criteria for PM USP Central Sector Interest Subsidy Scheme
Students must fulfill the following eligibility conditions:
- Education loan must be taken under the IBA Model Education Loan Scheme.
- Annual parental/family income should not exceed ₹4.5 lakh from all sources.
- Student must be enrolled in:
- NAAC Accredited Institutions
- NBA Accredited Professional/Technical Programmes
- Institutions of National Importance
- Centrally Funded Technical Institutions (CFTIs)
- Benefit is available only once for:
- Undergraduate Course OR
- Postgraduate Course
- Integrated courses are also eligible.
Students receiving any other Central or State Government scholarship or fee reimbursement are not eligible under this scheme.
Maximum Loan Amount Under PM USP Central Sector Interest Subsidy Scheme
| Benefit | Details |
|---|---|
| Maximum Eligible Loan | ₹10 Lakh |
| Interest Subsidy | Full Interest During Moratorium |
| Collateral Requirement | Not Required up to ₹7.5 Lakh |
| Scheme Type | Education Loan Subsidy |
Moratorium Period
Under the PM USP Central Sector Interest Subsidy Scheme, the Government pays the interest during:
- Complete Course Duration
- Plus One Year after Course Completion
This combined period is called the Moratorium Period. After this period, the student must start repaying the loan as per bank rules.
Eligible Courses & Institutions
The subsidy is available only for technical and professional courses approved by recognized bodies.
Eligible Institutions:
- NAAC Accredited Colleges
- NBA Approved Programmes
- Institutions of National Importance
- Centrally Funded Technical Institutions
Examples:
- Engineering
- Medical
- Pharmacy
- Management
- Professional Technical Degrees
Participating Banks
The scheme is available through:
- Scheduled Banks
- Regional Rural Banks (RRBs)
- Cooperative Banks
Nodal Bank:
Canara Bank is the official nodal bank for implementation of the scheme.
Interest Rates
Interest rates are decided according to:
- Benchmark Prime Lending Rate (BPLR)
- Base Rate of Individual Banks
- IBA Education Loan Guidelines
Banks may also provide additional concessions as per their internal policies.
Online Application Process for PM USP Central Sector Interest Subsidy Scheme
Students can apply online through the PM Vidyalaxmi Portal.
Step 1: Visit Official Portal
Open the PM Vidyalaxmi portal.
Step 2: Aadhaar Registration
Register using Aadhaar Number.
Step 3: Fill Application Form
Enter:
- Personal Details
- Educational Information
- Income Details
- Bank Information
Step 4: Upload Documents
Upload all required certificates and proof documents.
Step 5: Submit Application
Review the application carefully and submit online.
Documents Required
Applicants need the following documents:
- Aadhaar Card
- PAN Card
- Income Certificate
- Educational Certificates
- Admission Proof
- Bank Account Details
- Passport Size Photograph
- Other documents required by the bank
Important Guidelines
- Interest subsidy is available only if the student successfully completes the course.
- Students leaving the course midway are generally not eligible.
- Subsidy may continue in medical emergency cases with valid proof.
- Banks are responsible for ensuring course eligibility.
Important Links
- PM Vidyalaxmi Portal: Click Here
- Ministry of Education: Click Here
- Canara Bank Education Loan: Click Here
- NAAC Official Website: Click Here
- NBA Accreditation Portal: Click Here
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What is PM USP Central Sector Interest Subsidy Scheme?
It is a Government scheme providing full interest subsidy on education loans during the moratorium period.
Who can apply?
Students from economically weaker sections with family income up to ₹4.5 lakh annually.
What is the maximum loan amount covered?
Interest subsidy is available up to ₹10 lakh.
Is collateral required?
No collateral is required for loans up to ₹7.5 lakh.
Which courses are eligible?
Professional and technical courses from approved institutions.
External Resources
- Ministry of Education
- PM Vidyalaxmi Portal
- Canara Bank
- NAAC
- NBA