New Delhi: The Union Cabinet, chaired by Prime Minister Narendra Modi, has approved PM Vidyalaxmi, a new Central Sector scheme aimed at providing financial support to meritorious students so that financial constraints do not prevent anyone from pursuing higher studies. PM Vidyalaxmi is a key initiative under the National Education Policy, 2020, which recommended financial assistance to meritorious students through various measures in both public and private Higher Education Institutions (HEIs). Under the scheme, any student who gets admission to a quality HEI will be eligible for a collateral-free, guarantor-free loan from banks and financial institutions to cover the full amount of tuition fees and other course-related expenses. The scheme will be administered through a simple, transparent, student-friendly system that will be interoperable and entirely digital.
The scheme will be applicable to the top-quality higher educational institutions of the nation, as determined by the NIRF rankings. This includes all HEIs, both government and private, ranked within the top 100 in the overall, category-specific, and domain-specific rankings; state government HEIs ranked 101-200 in the NIRF; and all central government-governed institutions. The list will be updated every year based on the latest NIRF rankings and will start with 860 qualifying QHEIs, covering more than 22 lakh students who will be able to avail the benefits of PM Vidyalaxmi, if they so desire.
For loan amounts up to ₹7.5 lakh, students will be eligible for a 75% credit guarantee on the outstanding default. This will provide support to banks in making education loans available to students under the scheme.
Additionally, for students with an annual family income of up to ₹8 lakh who are not eligible for benefits under any other government scholarship or interest subvention schemes, 3% interest subvention will be provided for loans up to ₹10 lakh during the moratorium period. Interest subvention support will be given to one lakh students every year. Preference will be given to students from government institutions who have opted for technical or professional courses. An outlay of ₹3,600 crore has been made from 2024-25 to 2030-31, with 7 lakh fresh students expected to benefit from this interest subvention during the period.
The Department of Higher Education will have a unified portal, "PM-Vidyalaxmi," where students can apply for the education loan and interest subvention through a simplified application process that will be used by all banks. Payment of interest subvention will be made through E-voucher and Central Bank Digital Currency (CBDC) wallets.
PM Vidyalaxmi will build on and enhance the scope and reach of initiatives undertaken by the Government of India over the past decade in education and financial inclusion, maximising access to quality higher education for the youth of India. This will supplement the Central Sector Interest Subsidy (CSIS) and Credit Guarantee Fund Scheme for Education Loans (CGFSEL), two component schemes of PM-USP, implemented by the Department of Higher Education. Under the PM-USP CSIS, students with annual family income up to ₹4.5 lakh, pursuing technical or professional courses from approved institutions, get full interest subvention during the moratorium period for education loans up to ₹10 lakh. Thus, PM Vidyalaxmi and PM-USP will together provide holistic support to deserving students pursuing higher education in quality HEIs and technical or professional education in approved institutions.
BI Bureau