Credit Guarantee Fund Scheme for Education Loans (CGFSEL)
Updated: 22 Oct 2025
Ministry:
Ministry of Education
Beneficiary:
Miscellaneous, Youth and Students
Overview
The scheme provides credit guarantees for education loans from regional rural banks, helping reduce interest rates. Established in 2015, CGFSEL supports loans from public, private, and foreign banks against defaults.
- Education loans offered by around 30 regional rural banks (RRBs) will now have the credit shield from the CGFSEL.
- This will bring RRBs on a par with commercial banks and help them lower interest rate on such loans.
- The CGFSEL was set up by Ministry of Education in 2015 to ease education loans and extend guarantee coverage against default in education loans sanctioned by public, private, and foreign banks.
- At present, the scheme covers default on an education loan if the loan limit is ₹7.5 lakh without any collateral security or third-party guarantee.