Central Sector Interest Subsidy Scheme (PM-USP)
The older interest subsidy scheme, paying all interest during the study period for lower-income families taking loans for technical and professional courses.
Ministry of Education, Government of India · India
Open now, no closing date announcedClaimed through your lending bank, which files it on your behalf.
Why this one matters
Full interest cover is worth considerably more than the 3% subvention, and a family under the Rs 4.5 lakh income line should be checking this first rather than assuming the newer scheme is the better one.
What it covers
interest during moratorium. Levels funded: undergraduate, postgraduate.
The terms
- Full interest subsidy during the moratorium, on loans up to Rs 10 lakh
- For family income up to Rs 4.5 lakh a year
- Technical and professional courses at approved institutions only
- Runs alongside PM Vidyalaxmi rather than being replaced by it
Who can apply
- You must be a citizen of India
- Family income must be under Rs 4.5 lakh a year
Where applications fail
Most rejected applications are not ineligible students. They are eligible students who missed a step.
- You cannot claim this and the PM Vidyalaxmi subvention at the same time. Compare the two before your bank files either.
- The bank claims the subsidy on your behalf. If the branch does not file it, nothing happens and you are never told.
- Only technical and professional courses at approved institutions qualify. A general degree does not.
- Like PM Vidyalaxmi, this covers study in India, not overseas.
If this one is not for you
Being ruled out of a scheme is not the same as having no options. Here is what is still open.
- Income above Rs 4.5 lakh? The PM Vidyalaxmi 3% subvention runs up to Rs 8 lakh of family income.
- General degree rather than a technical or professional course? This scheme will not apply, but the IBA model scheme and CGFSEL both do.
- Studying overseas? Neither central subsidy covers it. Look at CGFSEL, the Ambedkar overseas scheme for eligible categories, and state overseas schemes.
Record status: partially_verified.
Last checked: 2026-09-13.
Scheme structure reported consistently across lenders and the PM Vidyalaxmi guidelines. Not confirmed against a ministry circular.
Source: https://www.education.gov.in/
Check whether you qualify