How to avail loans and scholarship for IPM at IIMs?
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Studying at an IIM can be expensive, and not everyone can finance it independently. In the following article, we discuss about the financial assistance available with scholarships and education loans.
I have been as comprehensive as possible, detailing everything you need to know before approaching the bank for a loan. Much of this article is based on my experience and research, though I have also talked to many of my batchmates and seniors across various IPMs. Still expect slight variations when you go through the same process.
IIM Indore provides Need-Based Financial Assistance based on family income and assets. The assistance provided is divided into the following two categories:
- If the family income is up to ₹4,50,000 and other assets criteria are met: The institute reimburses 100% of the interest accrued on the sum of money borrowed from the bank.
- If the family income is between ₹4,50,001 and ₹9,00,000 and other assets criteria are met: The institute reimburses 50% of the interest accrued on the sum of money borrowed from the bank. Check the assets criteria and other details: https://www.iimidr.ac.in/wp-content/uploads/NBFA2020-21_Scheme.pdf
Some other scholarships and awards have been instituted or sponsored at Indore but are not yet available to IPM students.
SC/ ST need-based scholarship: This scholarship is awarded by Ministry of HRD, Govt. of India, to the SC/ST students, based on the income declared by the student. Carently there are 12 scholarships. The scholarship amount can go up to the amount of Tuition and certain other Fees. The selection is based on specific criteria and assessment by a committee.
Merit scholarships: IIM Rohtak offers some form of scholarship to “top 5 rank holders“ based on CGPA annually. This is most likely in the form of a cash prize, reportedly ₹1,00,000 each to the rankers.
There earlier was an MCM (Merit-cum-Means Scholarship) awarded based on CGPA and family income. A minimum CGPA of 6.5 and parental income of ₹2,00,000 or less are essential conditions to qualify for this scholarship. The handbook for IPM02 (2020-25) mentioned this scheme. However, the MCM scholarship did not feature in the handbook provided to IPM03 (2021-26). Highly likely that the institute has permanently scrapped it, at least for IPM.
The newly-instituted Means-cum-Merit Scholarship sanctions ₹4 crores a year for 25 students across IIM Ranchi, including 4 seats for IPM. SC, ST, and PwD candidates will get extra consideration in the application process.
The Need-Based Financial Assistance (NBFA) scheme allows up to a 100% waiver of tuition fees based on family income. Each case application is assessed individually in a two-step process. From the IPM Manual of IIM Bodhgaya:
The Institute has “Need-based Financial Assistance (NBA)” scheme to provide financial support to needy IPM participants. The objective of the Need Based Financial Assistance (NBA) at IIM Bodh Gaya is to ensure that no participant is deprived of education at the institute for financial reasons. The NBA Committee undertakes a two-step process for deciding the number of awardees and the quantum of aid. The financial assistance offered will be capped at an amount equal to or close to the Tuition Fee during that Academic Year. The actual NBA awarded would be a percentage of the above maximum amount depending on the family income. The total amount granted under NBA will be limited to the NBFA budget available during that Academic Year. Disciplinary records of the participants will also be taken into consideration while awarding of NBA.
In the first stage, the participant’s financial need will be assessed by evaluating the application submitted by the participants. In the second stage, based on stage I assessment, participants may be called for a personal interaction with the NBA Committee. Based on the evaluation at stages I and II, applicants will be provided financial aid.
Central govt. Ministries sponsor many schemes for SC/ST, OBC categories, and other classes. The National Scholarship Portal (NSP) is a one-stop solution for government scholarships.
Apart from this, different State Governments (most notably, Madhya Pradesh) offer scholarships/student credit card schemes to eligible students. You can find details on this on the websites of governments of the state where you are domiciled (usually a requirement for these schemes.)
These two schemes are available based on the Indian Banks’ Association’s (IBA) Model Education Loan Scheme for Pursuing Higher Education in India and Abroad, 2021, a guideline for all banks’ education loan provisions:
IBA Interest Concession
When any amount is disbursed, the bank starts charging a simple interest during the repayment holiday (5+1 years). You can do one of two things — let this interest accrue (in which case it will be added to the principal amount, and you won’t need to pay anything for six years) OR keep servicing it. With the second option, one benefit is that the burden will be slightly lower when you repay the loan later. However, it may also make you eligible for a 1% concession on the interest rate. Since last year’s revision, the IBA has left this incentive to banks’ discretion: SBI discontinued it. CBI, though, still offers it.
- https://www.centralbankofindia.co.in/en/cent-vidyarthi(“1% interest concession may be provided by the bank during the study period, if interest is serviced during the study period and subsequent moratorium period prior to commencement of repayment.)
Central Sector Interest Subsidy (CSIS) Scheme, 2009*
If your annual gross parental/family income is under ₹4.5 lakhs, you are eligible for CSISS. The central government will fully pay the simple interest accrued (maximum of ₹10 lakhs) on your loan during the moratorium period (course period + one year).
- Your bank will need to claim the government’s subsidy half-yearly or yearly. An agreement is signed during the loan process.
- This scheme is independent of any other EWS schemes. To apply, you will need an income proof/certificate from an “authorised Public authority of the State Government.”
- Income proof doesn’t need to be submitted every year, even if income changes in the future.
It’s not certain whether CSISS and the interest concession can be combined. The IBA notes this in its model scheme (under 12. Repayment), but further details are difficult to find:
Banks at its discretion may provide 1% interest concession if interest is serviced during the study period and subsequent moratorium period prior to commencement of repayment. However, the Subvention provided by Government should not be a cause for providing 1% concession in rate of interest.
This makes it sound like an either/or, meaning you cannot avail of the concession if the government pays your interest under CSISS.
On the other hand, this is what Vidya Lakshmi says:
Under the IBA Scheme, 1% interest concession is provided for the loanees if the interest is serviced during the period when repayment holiday is specified for interest/repavment under the scheme. This 1% interest concession would be extended under the Central Scheme of Interest Subsidy, provided the Government of India disburses interest subsidy claims to the Banks on half-yearly or yearly basis.
*Talk to your branch manager about the policy they follow, and whether this is even applicable or not.
Some private charities (Sant Nirankari Mandal, Sikh Human Development Foundation, National Sikh Welfare Council, Swami Dayanand Education Foundation, Sitaram Jindal Foundation) and corporation trusts (IndusInd, Colgate, Tata, Reliance) also run monthly and annual cash scholarships. These are usually good for only small amounts (the most I have come across is ₹75,000-1,00,000 per annum, which is also rare) and can’t cover the humongous IPM fees entirely.
Further, most private sponsors stipulate that you cannot accept any scholarships from any other parties if you take their money. Looking into foundations may also involve significant hassle and research. Even then, it isn’t easy to find worthwhile sponsors.
That said, if you can’t find any other means to finance your studies, do look into private scholarships so that, if nothing else, your loan burden is reduced and/or you have some money to spend during college years. There’s a lot of variety here, and many schemes are highly specific (like Sitaram Jindal Foundation Scholarship for Students in Bangalore).
Check out these websites and make a list of all schemes where you are eligible:
- https://vidyasaarathi.co.in/ (Government portal for CSR scholarships by corporates; most schemes are for first-years and have a ceiling for 10,000-50,000.)
Some general schemes worth checking out:
- RKM Foundation (Hero MotoCorp) – Up to ₹5,00,000 per year – https://rkmfoundation.org/scholarships/
- Reliance Foundation – Up to ₹2,00,000 total – https://scholarships.reliancefoundation.org/UG_Scholarship.aspx
- Swami Dayanand Educational Foundation (SDEF) – https://www.swamidayanand.org/scholarship-india
- Baba Gurbachan Singh Scholarship Scheme (Sant Nirankari Mission) – Up to ₹50,000 per year
- SBIF Asha Scholarship – Up to ₹50,000 for one year – https://www.buddy4study.com/page/sbi-asha-scholarship-program
Make sure you go through the eligibility criteria (annual income and documents) and the deadline for each scheme before applying.
Note that most of these schemes are open to only first-year students. The scholarship application cycle is erratic because of the past three years’ late admissions. Make sure you keep track of the deadlines. (Do it before you report on campus. It gets hectic once the session has started!)