Rs 1,050 crore allocated for education loan schemes in FY 27, SBI top lender

During the current financial year 2026-27, an amount of Rs 1,050 crore has been allocated combined for PM Vidyalaxmi, CSIS and CGFSEL, while Scheduled Commercial Banks disbursed nearly Rs 39,000 crore in education loans in FY 2025-26.Among public sector banks, SBI remained the largest education loan lender (Photo: File/ITG) The Centre has allocated Rs 1,050 crore in the current financial year (2026-27) for multiple education loan support schemes aimed at making higher education more accessible, Finance Minister Nirmala Sitharaman informed the Rajya Sabha on Tuesday. The allocation covers the Pradhan Mantri Vidyalaxmi Scheme (PMVLS), the PM-USP Central Sector Interest Subsidy Scheme (CSIS) and the PM-USP Credit Guarantee Fund Scheme for Education Loans (CGFSEL).Replying to a starred question by MP Neeraj Shekhar, the minister also shared details of the government's education loan schemes and released bank-wise data on education loan disbursals by Scheduled Commercial Banks (SCBs) and private banks for FY2024-25 and FY2025-26. The ministry said RBI does not yet have data for FY2026-27.EDUCATION LOAN SCHEMES: WHAT STUDENTS GETThe government said all Scheduled Commercial Banks have adopted the Model Education Loan Scheme (MELS) formulated by the Indian Banks' Association. The scheme provides need-based education loans, with no collateral security or third-party guarantee required for loans up to Rs 7.5 lakh for students eligible under CSIS or CGFSEL.Under MELS:Loans up to Rs 4 lakh do not require any marginBorrowers get a moratorium covering the course period plus one yearRepayment tenure extends up to 15 yearsRBI has also advised banks not to mandatorily seek collateral for education loans up to Rs 4 lakhPM VIDYALAXMI SCHEME (PMVLS)The Pradhan Mantri Vidyalaxmi Scheme (PMVLS), launched on November 6, 2024, enables meritorious students admitted to top Quality Higher Educational Institutions (QHEIs) to access collateral-free and guarantor-free education loans.Under the scheme:Students from families with an annual income of up to Rs 8 lakh are eligible for a 3 per cent interest subvention on education loans of up to Rs 10 lakhUp to one lakh fresh students not receiving any other scholarship or education loan interest subsidy can avail the benefitThe interest subsidy is available during the moratorium period (course duration plus one year)Loans up to Rs 7.5 lakh receive a 75 per cent government credit guarantee to encourage banks to expand lendingThe total outlay for interest subvention under PM Vidyalaxmi between 2024-25 and 2030-31 is Rs 3,600 crorePM-USP CENTRAL SECTOR INTEREST SUBSIDY SCHEME (CSIS)The Finance Ministry also highlighted the PM-USP Central Sector Interest Subsidy Scheme (CSIS), launched in 2009. Under the scheme:Students from families with an annual income of up to Rs 4.5 lakh are eligibleProvides full interest subvention during the moratorium period (course duration plus one year)Applicable to students who have taken education loans under MELS or PMVLSCovers education loans of up to Rs 10 lakhAvailable for students enrolled in eligible professional and technical courses in:NAAC-accredited institutionsNBA-accredited programmesInstitutions of National ImportanceCentrally Funded Technical InstitutionsPM-USP CREDIT GUARANTEE FUND SCHEME (CGFSEL) The PM-USP Credit Guarantee Fund Scheme for Education Loans (CGFSEL) was launched in 2015.Under the scheme:The Centre provides a 75 per cent credit guarantee through the National Credit Guarantee Trustee Company (NCGTC)Applicable to education loans of up to Rs 7.5 lakhCovers loans taken without collateral or third-party guaranteeThe benefit is available irrespective of family incomeSBI REMAINS LARGEST EDUCATION LOAN LENDERAccording to RBI data shared by the Finance Ministry, Scheduled Commercial Banks disbursed Rs 40,253 crore in education loans during FY 2024-25, while provisional disbursals for FY 2025-26 stood at Rs 38,934 crore. The ministry clarified that data for the current financial year (2026-27) is not yet available.Among public sector banks, State Bank of India (SBI) remained the largest education loan lender, with disbursals increasing from Rs 11,072 crore in FY 2024 - 25 to Rs 13,370 crore in FY 2025-26 (provisional).It was followed by Union Bank of India (Rs 4,778 crore; Rs 4,274 crore), Canara Bank (Rs 4,332 crore; Rs 4,306 crore), Bank of Baroda (Rs 2,860 crore; Rs 2,871 crore), Punjab National Bank (Rs 1,756 crore; Rs 1,761 crore) and Central Bank of India (Rs 1,634 crore; Rs 1,662 crore).Among private sector banks, ICICI Bank disbursed Rs 4,621 crore in FY 2024-25 and Rs 3,775 crore in FY 2025-26, followed by IDFC First Bank (Rs 3,216 crore; Rs 961 crore) and Axis Bank (Rs 1,888 crore; Rs 1,795 crore).HDFC Bank's education loan disbursals stood at Rs 161 crore and Rs 198 crore, while City Union Bank reported a sharp increase from Rs 34 crore to Rs 139 crore over the two years.BankFY 2024–25 Disbursals (Rs crore)FY 2025–26* Disbursals (Rs crore)Scheduled Commercial Banks (Total)40,25338,934State Bank of India (SBI)11,07213,370Union Bank of India4,7784,274Canara Bank4,3324,306ICICI Bank4,6213,775IDFC First Bank3,216961Bank of Baroda2,8602,871Axis Bank1,8881,795Punjab National Bank1,7561,761Central Bank of India1,6341,662HDFC Bank161198City Union Bank34139*FY 2025–26 figures are provisional. Data for FY 2026–27 is not yet available, according to the Finance Ministry.Among other lenders, Shinhan Bank disbursed Rs 103 crore in FY 2024-25 and Rs 269 crore in FY 2025-26. Small finance banks together accounted for a negligible share of education loans, with only a handful reporting disbursals during the two years.- EndsPublished By: Mridusmita DekaPublished On: Jul 29, 2026 12:35 IST