MANGALURU: The Central government's educational loan initiatives for minority students have made a significant impact over the past five years, with southern states emerging as major beneficiaries, particularly under the now-discontinued Padho Pardesh scheme and the ongoing National Minorities Development & Finance Corporation (NMDFC) concessional loan programs, according to a report presented in the Lok Sabha on Wednesday.
The Padho Pardesh scheme, which provided interest subsidies for overseas education loans to minority students during the moratorium period, was discontinued in 2022-23 due to overlaps with other central schemes and a shift towards lower-interest education loans through banks. Despite its discontinuation, its legacy remains evident in the substantial benefits accrued by several states—especially Kerala, which has been the standout performer. From 2020 to 2025, Kerala reported a staggering 9,982 beneficiaries under Padho Pardesh alone, with total fund releases exceeding Rs 8.8 crore. The state consistently led year after year, showcasing the high overseas education aspirations among its minority population.
Other southern states like Karnataka, Tamil Nadu, Andhra Pradesh, and Telangana also featured prominently. Karnataka had 701 beneficiaries under Padho Pardesh, receiving close to Rs 5 crore in subsidies over the five-year span. Tamil Nadu followed with 343 beneficiaries and around Rs 2.2 crore disbursed. Andhra Pradesh and Telangana, though smaller in absolute numbers compared to Kerala and Karnataka, still recorded consistent utilization of the scheme, with Andhra Pradesh receiving over Rs 1.9 crore and Telangana around Rs 1.07 crore over the same period.
Meanwhile, under the NMDFC educational loan scheme, which offers concessional loans for both domestic and international studies, Kerala again emerged as a top performer. The state disbursed loans worth over Rs 38.6 crore to 2,279 students between 2020 and 2025, continuing its dominance even after the withdrawal of Padho Pardesh. Tamil Nadu, while trailing in absolute numbers, showed consistent engagement, assisting 43 students during this period. Notably, Maharashtra saw a late entry in 2023-24 with Rs 2.08 crore disbursed to 163 students, signaling a possible resurgence in uptake.
Outside the southern region, West Bengal and J&K stood out for their strong performance under educational loan schemes. West Bengal, notably under the NMDFC concessional loan program, assisted over 3,800 minority students, with disbursements crossing Rs 115 crore, making it one of the top-performing states nationally. J&K also maintained a steady beneficiary count across both Padho Pardesh and NMDFC schemes, reflecting active participation despite regional challenges.
In contrast, several populous states like Uttar Pradesh and Bihar with significant minority population reported consistently low engagement. Uttar Pradesh recorded only 64 Padho Pardesh beneficiaries over five years, and Bihar just 29, indicating significant gaps in awareness, outreach, or implementation of these schemes in regions where minority student support is critically needed.
In his response, Minister for Minority Affairs Kiren Rijiju clarified that NMDFC loans remain highly concessional, with interest rates ranging from 3% to 8% annually, depending on income levels and gender. While there are currently no plans to increase the subsidy amount or extend repayment periods, the ministry noted that it has not received significant feedback indicating repayment hardship, possibly due to the already favorable loan terms.
To improve participation from underrepresented regions, the scheme operates through State Channelizing Agencies (SCAs), and loans are extended based on actual demand. The variation in uptake across states underscores the importance of awareness, state-level implementation, and socio-cultural factors influencing overseas education preferences.