Lok Sabha Report Highlights Regional Disparities in Minority Education Loan Access

Educational Loan Initiatives Benefit Select States; Uttar Pradesh and Bihar Lag Behind

In a significant disclosure to the Lok Sabha, the Central Government detailed the measurable impact of its educational loan schemes aimed at minority students over the past five years. Notably, southern states emerged as key beneficiaries, demonstrating substantial utilisation under both the now-discontinued Padho Pardesh scheme and the ongoing concessional loan programmes administered by the National Minorities Development & Finance Corporation (NMDFC).

Officials clarified that the Padho Pardesh scheme, which offered interest subsidies on overseas education loans for minority students during the moratorium period, was discontinued in 2022–23. This decision was attributed to overlaps with other central initiatives and a strategic shift towards low-interest bank loans. Nevertheless, the scheme left a lasting imprint, particularly in Kerala, which recorded 9,982 beneficiaries and disbursed over ₹8.8 crore between 2020 and 2025, underscoring the strong demand for overseas education among the state’s minority communities. Other southern states also reported notable uptake. Karnataka supported 701 beneficiaries with nearly ₹5 crore in subsidies, Tamil Nadu recorded 343 beneficiaries with ₹2.2 crore disbursed, while Andhra Pradesh and Telangana received ₹1.9 crore and ₹1.07 crore respectively. Under the NMDFC scheme, Kerala once again led with disbursements exceeding ₹38.6 crore to 2,279 students. Tamil Nadu supported 43 students, and Maharashtra showed renewed engagement in 2023–24, disbursing ₹2.08 crore to 163 students.

Beyond the southern region, West Bengal and Jammu & Kashmir emerged as strong performers. West Bengal, under the NMDFC concessional loan programme, supported over 3,800 minority students with disbursements exceeding ₹115 crore, positioning it among the top-performing states nationally. Jammu & Kashmir maintained consistent participation under both schemes, despite ongoing regional challenges. In contrast, populous states such as Uttar Pradesh and Bihar, despite having sizable minority populations, exhibited minimal engagement. Uttar Pradesh recorded only 64 Padho Pardesh beneficiaries, while Bihar had just 29 over five years. This disparity suggests potential gaps in awareness, outreach, or implementation, which is particularly concerning given the pressing need for educational support among minority communities in these regions.

Responding to these findings, Minister for Minority Affairs Kiren Rijiju affirmed that NMDFC loans remain concessional, with interest rates ranging from 3% to 8% per annum, depending on income and gender. He further stated that there are no current plans to increase subsidies or extend repayment periods, citing the absence of significant complaints regarding repayment difficulties, likely due to the schemes’ already favourable terms. The ministry also emphasised that loan distribution is managed by State Channelising Agencies (SCAs) and is contingent upon actual demand. Officials noted that the variation in uptake across states underscores the critical role of local awareness, implementation efficiency, and cultural attitudes towards overseas education. The data reveals that while targeted schemes have made meaningful strides, equitable access hinges on robust outreach and state-level commitment.

Editor’s Note

Educational loan programs have significantly boosted minority students' access to higher education in India over the last five years, according to a recent Lok Sabha report. The now-defunct Padho Pardesh interest subsidy scheme and current NMDFC concessional loan programs have been particularly effective, especially in southern states such as Kerala, Karnataka, and Tamil Nadu. Kerala excelled in the Padho Pardesh scheme, aiding nearly 10,000 students with over ₹38 crore via NMDFC loans. West Bengal, Jammu & Kashmir, and recently Maharashtra, also showed strong participation. However, large states like Uttar Pradesh and Bihar had low participation, indicating issues with awareness and outreach, especially where support is most needed. Padho Pardesh ended in 2022–23 due to overlaps, shifting to bank loans, but its impact on minority overseas education remains evident. The NMDFC program continues, offering low-interest loans (3–8% based on income/gender), though usage varies widely.

Skoobuzz asserts that success depends on active State Channelising Agencies (SCAs), local support, political will, and community awareness; weak SCAs lead to missed opportunities. To fix this, the Ministry of Minority Affairs should boost awareness, simplify applications, and hold SCAs accountable. Digital outreach and linking schemes with school/college counselling can also help.