Money · Scholarships & loans

Paying for college: scholarships and education loans

Money should not decide your course. Use the free money first, then loans where the government pays part of the interest, and only then an ordinary loan.

By Anuj Arora · Last verified: 9 Nov 2026

Fund it in this order

The order to fund college First, scholarships: free money you never repay, such as the Central Sector Scholarship, AICTE Pragati and INSPIRE-SHE. Second, a subsidised education loan, where the government pays all or part of the interest while you study, through CSIS or PM-Vidyalaxmi. Third, an ordinary education loan, where you pay all the interest. Family savings and part-time work fill any gap. 1 · Scholarshipsfree money, never repaid Central Sector · AICTE PragatiINSPIRE-SHE · state and category schemes 2 · Subsidised loangovernment pays interest while you study CSIS: full interest, income up to ₹4.5 lakhPM-Vidyalaxmi: 3%, income up to ₹8 lakh 3 · Ordinary loanyou pay all the interest Compare banks on rate, fees andhow interest builds during the course
Family savings and part-time work fill whatever is left. The interest subsidies usually cannot be combined with a scholarship for the same course, so check which gives you more.

Scholarships worth applying for

ScholarshipWho can applyAmountApply on
Central Sector Scheme of ScholarshipTop 20% (80th percentile) of your Class 12 board, family income up to ₹4.5 lakh, regular degree course₹12,000 a year in years 1–3 of UG; ₹20,000 a year in PG and years 4–5 of professional coursesscholarships.gov.in
AICTE PragatiGirls in the first year of an AICTE-approved diploma or degree (or second year by lateral entry), family income up to ₹8 lakh, up to two girls per family₹50,000 a yearscholarships.gov.in
INSPIRE-SHETop 1% of your Class 12 board, or within the top 10,000 in JEE Advanced or NEET, studying natural or basic sciences, age 17–22₹80,000 a year for B.Sc and M.Sc; 10,000 awards a yearonline-inspire.gov.in
Post-matric scholarshipsSC, ST, OBC, minority and other categories, by family incomeFees plus allowances; varies by scheme and statescholarships.gov.in · your state portal
State scholarships and fee reimbursementSet by each state, mostly by income and categoryUp to full fees in some statesYour state's scholarship portal

Most schemes do not allow two scholarships for the same course, and most must be renewed every year with your marks. Applying is always free.

Loans where the government pays interest

SchemeWho qualifiesWhat you get
CSIS (interest subsidy)Family income up to ₹4.5 lakh; technical or professional course at an eligible institution (NAAC or NBA accredited, institutes of national importance, or approved by the course regulator)The government pays all the interest during the course and one year after, on loans up to ₹10 lakh. Once per student; not alongside another scholarship or fee reimbursement
PM-VidyalaxmiAdmission to a listed institution: NIRF top 100 (overall, category or domain), state government institutions ranked 101–200, and all central government institutions. The list is updated every yearA loan with no collateral and no guarantor; the government guarantees 75% of loans up to ₹7.5 lakh. If family income is up to ₹8 lakh and you get no other benefit, 3% interest relief during the course and one year after, on loans up to ₹10 lakh

Apply for both through the PM-Vidyalaxmi portal of the Department of Higher Education, or through your bank. The 3% relief is limited to about 1 lakh students a year, with priority for technical and professional courses at government institutions.

Loan calculator

Interest usually starts on the day the money is paid out, even though repayment starts later. See what that does to your loan.

–interest added during course + 1 year
–monthly EMI after that
–total you repay
–a month during study to stop interest piling up

Assumes the full loan is paid out on day one and interest during the course is simple. Banks pay out fees term by term and some compound interest, so ask your bank for its own schedule.

Before you sign

  1. Apply for scholarships first. They reduce how much you need to borrow, and borrowing less is the biggest saving of all.
  2. Compare more than the interest rate. Ask for processing fees, whether interest during the course is simple or compound, and whether early repayment carries a penalty.
  3. Take the money term by term. Interest runs only on what has been paid out.
  4. Pay the interest during the course if your family can. In the calculator's example (₹6 lakh at 10%, four-year course, seven years to repay), paying ₹5,000 a month while studying cuts the EMI from about ₹14,900 to about ₹10,000 and saves about ₹1.2 lakh overall.
  5. Keep every document. Sanction letter, disbursement receipts and the yearly interest certificate.

Tax relief on the interest

Under the old tax regime, whoever repays the loan (you or a parent) can deduct the full interest paid each year, with no upper limit, for up to eight years from when repayment starts. Only the interest counts, not the principal, and the loan must be from a bank or approved institution. The new tax regime does not allow this deduction.

No agent, no fee

Every scheme on this page is free to apply for, online, by the student. Anyone who asks for money to "get" you a scholarship or a subsidised loan is running a fraud.

Comparing colleges by cost?

The college choice scorecard weighs total cost against placements, faculty and the rest.

Open the scorecard

Sources

  1. Cabinet approves PM-Vidyalaxmi (6 Nov 2024): institutions, 75% guarantee, 3% subvention, link with CSIS
  2. Government guidelines on CSIS: ₹4.5 lakh income, ₹10 lakh loan cap, moratorium of course plus one year
  3. Central Sector Scheme of Scholarship: eligibility and amounts
  4. AICTE Pragati scholarship for girls
  5. INSPIRE-SHE, Government of India science portal
  6. Education loan interest deduction (section 80E) · not available under the new regime
  7. Official sites: scholarships.gov.in, online-inspire.gov.in, aicte-india.org, education.gov.in