Higher Education And Skill Development Guarantee Scheme(HESDGS)

Overview

About HESDGS

The Higher Education and Skill Development Guarantee Scheme puts no money in a student's hands. It puts the Delhi government's name behind a bank's education loan so that the bank lends without collateral and without margin money, and the borrower still repays the whole amount with interest on the bank's terms. The guarantee protects the lender against default, not the student against the debt (Directorate of Higher Education, Government of NCT of Delhi).

The instrument behind that promise is a corpus of Rs 30 crore called the Higher Education and Skill Development Credit Guarantee Fund, managed by the Delhi Higher Education and Skill Development Credit Guarantee Fund Trust, which issues cover to banks only up to what the corpus can carry (scheme document, Directorate of Higher Education).

The Directorate of Higher Education has run the scheme since 2015-16, and it describes the loan cap and the Trust in the same terms today (Economic Survey of Delhi, 2023-24). Chief Minister Arvind Kejriwal inaugurated its online application portal on 20 June 2016, and the Directorate of Information and Publicity described it then as a first of its kind initiative in India (Directorate of Information and Publicity, GNCTD).

How thinly the scheme is actually used belongs near the top rather than at the foot of the terms. The Directorate's own reporting to the Planning Department counts applications in dozens a year and sanctions on the fingers of one hand.

The trail then thins. The most recent Economic Survey has no entry for the scheme anywhere in it: the Directorate's pages describe only the Delhi Higher and Technical Education Support Scheme, which runs on a different trust altogether (Economic Survey of Delhi, 2025-26). The Directorate's website still publishes the scheme, its rules, its bank list and its institution list, and e-District Delhi still lists the service, so treat it as live but small rather than closed.

Who runs it

Provider

At a glance

Key details

Calendar

Important dates

Nothing here works to an academic calendar. There is no round, no last date and no annual notification, because the trigger is a sanctioned admission and the file moves at the pace of a bank credit decision. The dates that bind are the ones already quoted: sanction or rejection normally inside 15 days, disposal between 15 days and one month, and a 30 day service timeline on the portal.

The dates that matter after sanction are longer. The repayment holiday runs for the course period plus one year, repayment is in equated monthly instalments over 15 years for all categories, and where an early career salary cannot carry a level EMI the bank may consider stepping the instalments up over time (scheme document, Directorate of Higher Education).

Who can apply

Eligibility criteria

The domicile test here is not a residence certificate. It is a schooling test: the student must have passed both Class X and Class XII from Delhi, and where the qualifying examination for the course is Class X, passing Class X in Delhi is enough. Children of Government of NCT of Delhi employees, and of officials and government servants posted with the Delhi government, are eligible on that basis instead (scheme document, Directorate of Higher Education).

A Delhi resident who took either board examination outside Delhi is refused, and the department's own service FAQ answers that question with the words Not Eligible (scheme FAQ, e-District Delhi).

The admission itself must have been won through an entrance test or a merit-based selection process after the qualifying examination. A student who clears the merit quota but then takes a management quota seat is still to be treated as eligible by the bank, and for such seats the fee reckoned is the one approved by the government or its regulatory body (scheme document, Directorate of Higher Education).

Where the student studies decides more than anything else. Inside Delhi the guarantee covers government institutions and universities and the constituent colleges of the University of Delhi, and private or self-financed institutions carrying NAAC or NBA accreditation, for which the required grade is A or B. Institutions without that accreditation qualify on the grading given by the Third State Fee Regulatory Committee, for which the grade must be A+ or A, and the cover is confined to institutions whose fee is regulated by the government (scheme document, Directorate of Higher Education).

Skill training is inside the scheme rather than beside it. Courses run by the World Class Skill Centre, and other technical training or skill development institutions specified by the Delhi government, carry the same guarantee as a degree (scheme document, Directorate of Higher Education).

Rather than argue about whether a particular college qualifies, read the department's notified list, which runs from Delhi Technological University at serial number 1 to the Indian Institute of Foreign Trade at serial number 287 and covers Delhi University colleges, GGSIP University affiliates, SCERT teacher training institutes, Delhi Nursing Council schools and the government ITIs (list of institutions covered, Directorate of Higher Education).

Income and age are missing from the tests, and both are missing on purpose. The scheme is written as universal regardless of the student's background, so no family income ceiling applies, and no minimum age is stipulated either, though a bank that took documents from a parent while the student was a minor will ask the student for a letter of ratification on attaining majority (scheme document, Directorate of Higher Education).

Who cannot apply

Exclusions

Look for a list of who is barred and there is none to find. Delhi wrote the boundaries into the eligibility rules instead, and the three that bite are about buildings rather than people: where the institution stands, what grade it holds, and whether its fee is government-regulated.

Study outside Delhi is the sharpest of them. Only Central or State government universities and institutions located outside Delhi and within India are covered, which puts every private college in another state outside the guarantee even for a student who has never studied anywhere but Delhi (scheme FAQ, e-District Delhi).

Inside Delhi the exclusions are accreditation and fee regulation. A private institution below NAAC or NBA grade B, or below SFRC grade A, falls outside, and so does an institution whose fee the government does not regulate, however well known it is (scheme document, Directorate of Higher Education).

Foreign study has no place in the scheme at all. Every course head in the guidelines is framed as a course pursued in Delhi or at a government institution elsewhere in India (scheme document, Directorate of Higher Education).

Continuation

Renewal conditions

There is no yearly form to file again, because a sanctioned loan is one credit decision rather than an annual award. The bank releases it in stages as the course demands, paying the institution or the vendor of equipment directly wherever it can, and it keeps contact with the college or university to collect progress reports on borrowers at regular intervals (scheme document, Directorate of Higher Education).

What can be added later is a top-up. A bank may consider a further loan for further studies within the overall eligibility limit, provided that the further course begins during the moratorium of the first loan. If the course itself overruns, the bank may extend the completion period by up to two years, and by longer at the sanctioning authority's discretion where the delay is beyond the student's control (scheme document, Directorate of Higher Education).

What you get

Award & benefits

The benefit is the cover itself, and the ceiling on it is the number most searchers arrive looking for.

The ceiling has an internal seam. The guidelines expect loans up to Rs 7.5 lakh to be taken under the Government of India's Credit Guarantee Fund Scheme for Education Loans where its conditions are met, and reserve the Delhi cover for loans above Rs 7.5 lakh and up to Rs 10 lakh, and for loans to private institutions that hold SFRC grade A+ or A but lack the NAAC accreditation the central scheme requires (scheme document, Directorate of Higher Education).

There is no interest subsidy anywhere in the scheme. The rate is set by the lending bank and only capped, at Base Rate plus 2%, with simple interest charged through the study period and up to the start of repayment; servicing that interest is optional, and unserviced interest is added to the principal before the EMI is fixed (scheme document, Directorate of Higher Education).

Say the vintage of that cap out loud, because it is the oldest thing in the document. Base Rate is the internal benchmark the Reserve Bank of India applied to floating rate rupee loans sanctioned and renewed between July 1, 2010 and March 31, 2016, after which the marginal cost of funds based lending rate took over, and new floating rate retail loans moved again to an external benchmark from October 01, 2019 (Master Direction on Interest Rate on Advances, Reserve Bank of India).

That leaves the ceiling pointing at a benchmark no bank publishes for a new loan any more, so as a cap it fixes nothing a borrower can check against a rate card. Lenders have simply repriced around it. Bank of Baroda, which still carries the Delhi scheme as a product, quotes it off its Baroda Repo Linked Lending Rate: BRLLR plus 2.00% per annum up to Rs 7.5 lakhs, BRLLR plus 1.75% per annum above that, with no special concession on the rate for female students (Bank of Baroda). The rate that will govern the account is the one written into the sanction letter, not the formula printed in the guidelines.

The same page then disagrees with itself about who pays for the guarantee, and it is the borrower who sits in the gap. Higher up it reproduces the guidelines word for word, and those put an Annual Guarantee Fee of 0.5% of the outstanding amount on the bank, payable to the Fund within 30 days of the Credit Guarantee Demand Advice Note, with later years' fees reckoned on the outstanding at the start of the financial year (scheme document, Directorate of Higher Education).

A few lines below, in its own voice rather than the government's, the bank writes that the guarantee fee of 0.50% of the outstanding amount is to be recovered from the borrower and paid to the Trust (Bank of Baroda). On the Delhi document the cost belongs to the lender; on the lender's page it has moved onto the student. Settle which reading the branch will apply before signing, because the fee is annual and reckoned on the outstanding rather than charged once at sanction.

What the loan may pay for is wider than tuition: college, school or hostel fees, examination, library and laboratory charges, the student borrower's insurance premium, books, equipment, instruments and uniforms, a computer where the course needs one, and study tours, project work or a thesis. Caution deposits and refundable building fund payments are allowed only against institution receipts and only up to 10% of the total tuition fee for the whole course (scheme document, Directorate of Higher Education).

• The maximum amount of education loan guaranteed under this scheme is up to ₹ 10 Lakhs Only.

What to prepare

Documents required

The paperwork is thinner than a scholarship file because the bank, not a scrutiny committee, is the decision maker. The department asks for the student's Aadhaar card, PAN card, the Class X certificate where the qualifying examination is Class X and the Class XII certificate where it is Class XII, both passed from Delhi, a photograph, and a declaration carrying the photograph, signature and date (scheme FAQ, e-District Delhi).

Two conditional documents decide most rejected files. A student claiming eligibility as the child of a Delhi government employee or of an official posted with the Delhi government files an employer's certificate. A student going to a government university or institution outside Delhi has to upload a certificate from that institute or college confirming it, in the format the department publishes for download, and that certificate is mandatory at the time of application or sanction (scheme FAQ, e-District Delhi).

PAN is the one item with slack in it. It is not mandatory when the loan is applied for or sanctioned, but the student has to furnish PAN details before the second instalment is released (scheme FAQ, e-District Delhi).

A domicile certificate is not on the standard list, but the guidelines tell banks that a domicile certificate issued by the Tehsildar of the Revenue Department, Government of NCT of Delhi, is to be accepted as proof of domicile where one is required (scheme document, Directorate of Higher Education).

Banks are also allowed to ask for authenticated copies of a student's academic performance sheets, and to take a declaration or affidavit that no loan has been availed from another bank, though a no dues certificate cannot be demanded as a precondition (scheme document, Directorate of Higher Education).

Step by step

How to apply

Applications may be given directly at a bank branch or filed online, and on receipt the branch must issue a standard acknowledgement with a reference number and the contact details of the official to approach if the file stalls (scheme document, Directorate of Higher Education).

The department's own instruction is that only online applications are accepted, after which the printed application and the uploaded documents go in hard copy to the concerned bank branch (scheme FAQ, e-District Delhi).

Finding that online form is where applicants lose time, because the addresses printed in the scheme's own paperwork have stopped working. The department FAQ sends students to studentloan.delhigovt.nic.in for the bank list, the institution list, the controlling-bank list and the registration itself; that hostname no longer resolves in the domain name system at all. For the scheme details the same FAQ gives studentloan.delhi.gov.in, which is also the address the Economic Survey prints; that one resolves, but the server behind it refuses the connection. So does web.delhi.gov.in, where myScheme's copies of the guidelines and the bank list still point.

The route that answers is the citizen portal, and the Directorate's own Apply Now button now points straight at it (Directorate of Higher Education, Government of NCT of Delhi). On the service list the entry to look for carries the word Modified in front of the scheme's name and a prescribed timeline of 30 days against it (services available at e-District Delhi). Registration and filing happen there, under Citizen's Corner.

Where the file physically sits changes once it is sanctioned. A student may lodge the application at the branch nearest the parents' residence or at the educational institution, KYC is completed by the branch nearest the parents' home, and after sanction the case moves to the branch near the institution for follow up (scheme document, Directorate of Higher Education).

Tracking the application

Tracking runs on two clocks, and it helps to know which one to quote. The bank's clock is set by the guidelines: sanction or rejection is normally to be communicated within 15 days of a complete application with supporting documents, and disposal is to take between 15 days and one month, never longer than the norms for priority sector lending (scheme document, Directorate of Higher Education).

The portal's clock is the 30 day service timeline printed against the scheme in the e-District service list, and the same portal publishes an Application Processed Status Report where Higher Education can be picked as the department and the applications filtered by the dates on which they were received (application processed status report, e-District Delhi). Beyond that report, the file's own status sits behind the applicant's e-District login.

Sanctioned loans are meant to be visible upstream as well. The Directorate, working with the State Level Bankers Committee, was to set up a portal on which sanctioned loans are uploaded immediately, and on which banks upload recovery and default status every six months (scheme document, Directorate of Higher Education).

How winners are picked

Selection process

No department committee ranks applicants and no merit list is published. The bank appraises the loan, and the guidelines narrow what it may weigh: in the normal course only the future income prospect of the student is to be looked into (scheme document, Directorate of Higher Education).

A refusal is not meant to be a quiet one. Rejection requires the concurrence of the controlling authority of the branch, must be intimated to the Directorate of Higher Education, and must be conveyed to the student with the reason stated (scheme document, Directorate of Higher Education).

Above the branch sits a named forum. A Grievance Redressal Committee headed by the Director, Higher Education, with one member each from the Indian Banks Association, the Lead Bank and Canara Bank, handles complaints including rejected cases, and is to meet monthly or more often as needed (scheme document, Directorate of Higher Education).

Which banks can lend is itself part of the test. The guarantee is confined to education loans sanctioned by member banks of the Indian Banks Association or other banks and financial institutions identified by the Delhi government (scheme document, Directorate of Higher Education).

The published list of approved banks carries 14 names, with all Delhi branches covered for most of them and named branch lists for Punjab National Bank and Oriental Bank of Commerce (list of approved banks, Directorate of Higher Education).

Seven of those names have since ceased to exist as banks, so the list has to be read through the amalgamations. Vijaya Bank, which the department's service FAQ still names as the nodal bank for the scheme, was amalgamated with Dena Bank into Bank of Baroda with effect from 1 April 2019 (Press Information Bureau, Ministry of Finance).

The rest went in the next round: Oriental Bank of Commerce and United Bank of India into Punjab National Bank, Syndicate Bank into Canara Bank, Andhra Bank and Corporation Bank into Union Bank of India, and Allahabad Bank into Indian Bank, all with effect from 1.4.2020 (Press Information Bureau, Cabinet). The successor banks are the ones to approach.

Fine print

Terms & conditions

The clause a borrower should read first is the default clause, because it decides what the guarantee is actually worth. On default and invocation of the claim, the Fund settles 75% of the claim after the credit facility has been recalled and recovery proceedings have begun under due process of law, and the balance 25% only after those proceedings conclude and the lender's final loss is established (scheme document, Directorate of Higher Education).

Read that plainly: recovery is not switched off by the guarantee, it is a precondition of it. The bank must pursue the borrower before the Fund pays, and the household stays liable throughout.

The consequences reach past the loan account. The credit scores of both the parents and the student are affected by default, which the guidelines say will raise the cost of and reduce access to future borrowing, and the guidelines further contemplate using the Aadhaar linkage captured by the bank to deny an individual the benefit of any Delhi government project or scheme once the loan turns into a non-performing asset (scheme document, Directorate of Higher Education).

Collateral-free is not co-borrower-free. Up to Rs 10 lakh no security is taken, but the loan documents are to be executed by the student and the parent or guardian as joint borrower, and for a married borrower the joint borrower may be the spouse or the parents or parents-in-law (scheme document, Directorate of Higher Education).

Some conditions run in the borrower's favour. An existing education loan to a brother or sister does not affect a second child's eligibility, no processing charges are to be levied, and no prepayment penalty applies at any point in the repayment period (scheme document, Directorate of Higher Education).

Insurance is optional and the guidelines nudge it toward the cheapest available route. Banks may arrange life cover for the student, working out the terms with insurers, and the guidelines name Pradhan Mantri Jeevan Jyoti Bima Yojana and Pradhan Mantri Suraksha Bima Yojana as ways to keep the premium reasonable while giving the parents a safety net (scheme document, Directorate of Higher Education).

Institutions carry an obligation too. Educational, technical training and skill development institutions are to share the progress reports of borrowing students with the banks at regular intervals where the bank asks, which the guidelines describe as a way to reduce deliberate default (scheme document, Directorate of Higher Education).

Get help

Contact

The Directorate of Higher Education, Government of NCT of Delhi, owns the scheme, and it now works from the BTE Complex on Muni Maya Ram Marg in Pitampura, Delhi (Directorate of Higher Education, Government of NCT of Delhi).

The scheme's own service FAQ still prints the Directorate's older Sham Nath Marg address and a dedicated student loan email address for the scheme, and tells a student refused by a member bank to approach that bank's controlling office before approaching the Directorate (scheme FAQ, e-District Delhi). The nodal bank named there, Vijaya Bank, no longer exists, so the escalation that still works is the controlling office of the successor bank, and then the Directorate's Grievance Redressal Committee.

Source

Official links

Frequently asked questions

From the official scheme FAQ (myScheme)

Read this

Disclaimer

Disclaimer

Scheme details are compiled from myScheme, the Government of India’s official scheme-discovery platform, and are reproduced without alteration. Amounts, deadlines and eligibility change between cycles, so always confirm on the official links above before applying. Expertie does not process applications or charge fees.

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References

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