Government education loans and scholarships for studying abroad (2026)

Families often ask us for “the government education loan” for study abroad, expecting one central scheme with a low rate. There is no such loan. What the government offers is a set of smaller pieces: overseas scholarships for some communities, low-interest loans from national development corporations routed through state agencies, a guarantee that lets banks lend up to ₹7.5 lakh without collateral, and tax relief on the interest. Two well-known subsidies have also closed.

This guide sets out which schemes are open for study abroad in 2026, who can use them and how much they give, from ministry pages, government orders and parliamentary answers checked on 5 November 2026, with the Tamil Nadu schemes in detail.

Does the Indian government give education loans for abroad studies?

Not directly. Education loans for study abroad come from banks and lending companies. The government helps through scholarships, corporation loans, a loan guarantee and tax relief. These are the central schemes, open and closed:

Most students who use these also need an ordinary bank loan for the rest. Fees paid abroad from a bank education loan carry no tax collected at source, and the interest is deductible under the old tax regime. Our guide to education loans without collateral compares the bank and private lenders.

Is there an interest subsidy on education loans for study abroad?

Not for new students. Two subsidies that still appear in many online lists have closed:

Is Padho Pardesh still open?

• Padho Pardesh (discontinued), the interest subsidy for minority students studying abroad. The Minority Affairs ministry told Parliament it decided “to discontinue Padho Pardesh Scheme from 2022-23 onward”, after 20,365 students had used it, and repeated in June 2025 that it “has been discontinued from FY 2022-23”.
• The Dr. Ambedkar interest subsidy for OBC and EBC students, which paid the interest during the moratorium on a loan for a master’s or PhD abroad. Its nodal bank says it is “not to consider/accept fresh applications… till further orders”, and the guidelines covered 2021-22 to 2025-26; we found no notice reopening it.

Does PM-Vidyalaxmi cover study abroad?

PM-Vidyalaxmi is the other common confusion. Its interest subvention and collateral-free guarantee are for students admitted to quality higher education institutions in India, as ranked by NIRF, so they do not apply abroad. But its portal is the government’s unified application route for ordinary education loans “in India and abroad” from banks, so you will probably still use it. The older central interest subsidy, CSIS, is also for courses in India only.

Does the Indian government give scholarships for studying abroad?

Yes, but only for some communities. The central government’s main scheme is the National Overseas Scholarship, which pays tuition and living costs. There are two versions:

National Overseas Scholarship for SC students: eligibility and 2026-27 dates

Run by the Ministry of Social Justice, it offers 125 awards a year: 115 for Scheduled Caste students, 6 for denotified, nomadic and semi-nomadic tribes and 4 for landless agricultural labourers and traditional artisans, with 30% set aside for women. Under the 2026-27 guidelines:

• Family income must not exceed ₹8 lakh a year, you must be 35 or under on 1 April, and you need 60% in your qualifying degree.
• It is for a master’s or PhD, not a bachelor’s, with an unconditional offer from a university in the QS top 500.
• For the USA you must go on a J-1 visa through a university that sponsors one; an F-1 applicant is not eligible. Students already studying abroad cannot apply.
• It pays tuition at actual cost, a yearly allowance of US$15,400 (about ₹14.8 lakh) or £9,900 in the UK (about ₹12.6 lakh), visa fees, medical insurance and an economy flight.

The first round for 2026-27 ran from 24 April to 2 June 2026 on the NOS portal. The guidelines provide a second round in September or October for any places left, but the portal was down on 5 November 2026 and we could not confirm whether it opened; the ministry says the scheme is moving to its new SAMAVESH portal. If the 2027-28 round follows the same pattern, it will open in late April 2027. The ministry told Parliament that 78 students were awarded scholarships and enrolled abroad in 2025-26, well short of the 125 places, and the guidelines say incomplete applications are rejected outright, so check every document before you submit.

National Overseas Scholarship for ST students

The Ministry of Tribal Affairs gives 20 awards a year for a master’s, PhD or post-doctoral study, 3 of them for particularly vulnerable tribal groups, at universities in the QS top 1000. Family income must be up to ₹6 lakh, with 55% marks and an age limit of 32 for a master’s. The 2026-27 deadline was 31 July 2026, and the ministry says a proposal to raise the income limit and the number of places is being appraised for 2026-31.

Is there a National Overseas Scholarship for OBC students?

No. The National Overseas Scholarship is for SC students, denotified, nomadic and semi-nomadic tribes, landless labourers and artisans, and a separate scheme covers ST students. OBC students can borrow up to ₹25 lakh at 8% from NBCFDC through their state agency, which is TABCEDCO in Tamil Nadu. The Dr. Ambedkar interest subsidy for OBC students has taken no new applications since 2023-24.

Can you get a low-interest government loan for study abroad?

Yes, if you belong to a community served by one of the national development corporations. They do not lend to you directly: the money goes through a state agency or bank, which in Tamil Nadu is TABCEDCO, TAMCO or TAHDCO.

• NSFDC, for Scheduled Caste students: up to ₹40 lakh or 90% of the course fee, whichever is less, at 6.5% to the student, for courses in India or abroad, with repayment starting a year after the course.
• NMDFC, for minorities: up to ₹30 lakh for courses abroad, at 3% for family incomes up to ₹3 lakh and 8% up to ₹8 lakh, with a 3% concession for women on the higher line.
• NBCFDC, for backward classes: up to ₹25 lakh at 8%, for family incomes up to ₹5 lakh, repaid over up to ten years including a five-year moratorium. For study abroad its FAQ asks for admission through a test such as SAT, GMAT or GRE.
• NSTFDC, for Scheduled Tribe students: its education loan is for courses in India, so ST students going abroad should look at the scholarship above.

These loans are cheaper than a bank’s but smaller, and are paid out in instalments, by semester or half-year, against the fees. For a UK or US master’s they cover part of the cost, with savings or a bank loan for the rest.

What Tamil Nadu government loans and scholarships are there for study abroad?

TABCEDCO loan for BC, MBC and denotified communities

TABCEDCO lends to BC, MBC and denotified community students for higher study at foreign universities. Its June 2026 district notice gives up to ₹25 lakh, 85% from NBCFDC and 15% from the state, at 8%, for families earning up to ₹5 lakh, students aged 21 to 40 and admission through a test such as SAT, GMAT or GRE. There is a five-year moratorium and ten years in all to repay. Apply at your district Backward Classes and Minorities Welfare Office or a district central cooperative bank. TABCEDCO’s own website FAQ lists only its business and group loans, so ask the district office for the education form.

TAMCO loan for minority students

For Muslim, Christian, Sikh, Buddhist, Parsi and Jain students aged 16 to 32, TAMCO lends up to ₹6 lakh a year for courses abroad, to a maximum of ₹30 lakh, at 3% for family incomes up to ₹3 lakh, and 8% for men or 5% for women up to ₹8 lakh. Repayment runs for five years from six months after the course, and each year’s instalment needs a pass in the previous year’s exams.

TAHDCO education loan for SC students: how to apply online

TAHDCO takes applications online through its education loan portal, and its site lists up to ₹40 lakh for study abroad through NSFDC for SC students with family incomes up to ₹5 lakh (the same card also shows a ₹3 lakh income headline), and up to ₹20 lakh abroad for children of sanitation workers through NSKFDC. The figures on its page are labelled 2024-25, so confirm them when you apply.

Annal Ambedkar overseas scholarship for Adi Dravidar and ST students

Tamil Nadu’s own overseas scholarship, not to be confused with the closed central Dr. Ambedkar interest subsidy, is for Adi Dravidar, Christian Adi Dravidar and Scheduled Tribe students. It pays up to ₹36 lakh a year towards tuition and living costs if family income is up to ₹8 lakh, and up to ₹24 lakh between ₹8 lakh and ₹12 lakh, for a master’s, PhD or post-doctoral course at a university in the QS top 1000. From 2026 there is one application window a year, timed for the autumn intake (in 2026, 5 May to 5 June) , and you must apply before you leave: students already studying abroad, or who have completed a course abroad on other funding, are not eligible. Applicants must be 35 or under for a master’s and 40 or under for a PhD, and a conditional offer is accepted. Only one person per family can use it. In August 2026 the minister said 362 of 500 applicants had been selected. Applications are on the department’s scholarship portal.

Overseas scholarship for Muslim students

The state also funds 10 Muslim students a year for a master’s abroad. The 2025 guidelines give up to ₹36 lakh per student, for an unconditional offer from a university in the QS top 250, family income up to ₹8 lakh, 60% in the first degree and an age of 30 or under. We could not find a 2026-27 call, so check with the district office.

Do other states have overseas schemes?

Several do, but only for their own residents. Telangana’s overseas scholarship schemes for SC, ST, BC and minority students give up to ₹20 lakh to families earning under ₹5 lakh, with 60% in the degree and a GRE or GMAT score, and published an SC selection list in July 2026. If your family lives in another state, search its social welfare department for “overseas scholarship” and check the date on the notice.

How does a bank education loan for study abroad work?

Most banks follow the Indian Banks’ Association model scheme, which sets the basic rules for loans abroad:

• A guideline ceiling of ₹20 lakh for study abroad, though banks lend more case by case.
• No security up to ₹4 lakh, a third-party guarantee from ₹4 lakh to ₹7.5 lakh, and property or other collateral above ₹7.5 lakh.
• A 15% margin from the family above ₹4 lakh for study abroad, which scholarships can count towards.
• No repayment during the course and for a year after, then up to 15 years of instalments.

The government’s guarantee fund lets banks waive the third-party guarantee: it covers loans up to ₹7.5 lakh without collateral or a guarantor, for study in India or abroad, and from September 2026 eligible scheduled state and urban cooperative banks can use it too. Our guides to which bank to choose, SBI’s education loan and education loans in Tamil Nadu cover rates, banks and documents.

Can you claim 80E on an education loan for study abroad?

Yes. The deduction is now section 129 of the Income-tax Act, 2025, and it covers loans for study abroad.

• Interest deduction: section 129 of the Income-tax Act, 2025, which replaced section 80E, lets the borrower deduct the interest paid on a loan for higher education of themselves, a spouse, a child or a student they are legal guardian of, paid out of taxable income, for up to eight years, with no upper limit. It covers loans from banks and approved institutions, and applies under the old tax regime.
• No tax collected at source on loan money: when fees are paid abroad from an education loan from a financial institution, no TCS is collected. If the family pays from savings, TCS of 2% applies to education remittances above ₹10 lakh in a year from 1 April 2026, under the 2026-27 Budget, and any TCS collected counts against the sender’s income tax.

Which scheme should you apply for?

• SC students: the National Overseas Scholarship and, in Tamil Nadu, the Annal Ambedkar scholarship, with a TAHDCO loan as a back-up.
• ST students: the ST National Overseas Scholarship and, in Tamil Nadu, the Annal Ambedkar scholarship.
• BC, MBC and denotified community students in Tamil Nadu: a TABCEDCO loan for part of the cost, and a bank loan for the rest.
• Minority students: a TAMCO loan, and the 10-seat state scholarship for Muslim students if it runs.
• OBC students outside Tamil Nadu: an NBCFDC loan through your state’s channelising agency.
• Everyone else: a bank loan, which keeps the tax deduction and avoids TCS on fees, and university scholarships.

The scholarship windows are early, between April and July of the year you travel, so they need planning from the previous autumn, before you have all your offers. Our guide to education loan documents lists what banks ask for.

Government scheme checklist

• Community and income certificates current and issued by the right authority.
• National Overseas Scholarship (SC) from late April; ST version by July.
• Annal Ambedkar scholarship around May, before you travel.
• TABCEDCO, TAMCO or TAHDCO forms from the district office once you hold an offer.
• Bank loan applied for through the PM-Vidyalaxmi portal, with the interest deduction claimed each year.

Can we help you find the right scheme?

Yes. Our education loan team in Egmore, Chennai, can check which schemes your family qualifies for, plan the timing around your applications and put together the documents. You can also start with a free profile evaluation.