Cabinet Approves PM-Vidyalaxmi Scheme to Support Meritorious Students with Education Loans
New Delhi, November 5, 2024: The Union Cabinet, chaired by Prime Minister Narendra Modi, has approved the launch of the PM-Vidyalaxmi scheme, aimed at providing financial support to meritorious students to ensure that financial constraints do not prevent them from pursuing higher education. The scheme is designed to help students gain access to education loans for quality higher education, making it easier for them to study without worrying about financial barriers.
Under PM-Vidyalaxmi, a mission-mode mechanism will facilitate the extension of education loans to students admitted to the top 860 higher educational institutions (HEIs) in India. These institutions will include those ranked in the top 100 by the National Institutional Ranking Framework (NIRF), as well as state government HEIs ranked 101-200. The scheme is expected to benefit more than 22 lakh students annually, covering their tuition fees and other course-related expenses.
Key Features of the PM-Vidyalaxmi Scheme:
- Collateral-Free Loans: Students will be eligible for collateral-free and guarantor-free loans, accessible through a simple, transparent, and fully digital application process.
- Credit Guarantee: Loans up to ₹ 7.5 lakhs will receive a 75% credit guarantee from the government, supporting banks in expanding loan coverage.
- Interest Subvention: For students with an annual family income of up to ₹ 8 lakhs, the scheme will provide a 3% interest subvention on loans up to ₹ 10 lakhs during the moratorium period. This will help students repay loans more easily. An estimated 1 lakh students will benefit from this subvention annually.
- Additional Benefits: Students with annual family income up to ₹ 4.5 lakhs are already eligible for full interest subvention under the Central Sector Interest Subsidy (CSIS) program, which will continue in tandem with PM-Vidyalaxmi.
A Digital and Transparent Process:
The PM-Vidyalaxmi portal, managed by the Department of Higher Education, will allow students to apply for education loans and interest subvention in a unified, user-friendly system. The entire process will be digital and interoperable, ensuring transparency and ease of access for all applicants.
Financial Support and Implementation:
The scheme is set to disburse ₹ 3,600 Crore between 2024-25 and 2030-31 to benefit 7 lakh fresh students. The government aims to supplement existing initiatives like PM-USP (Pradhan Mantri Udyami Shiksha Programme) to further expand the reach of financial aid for meritorious students.
By addressing both financial access and educational quality, the PM-Vidyalaxmi scheme is expected to make a significant impact on India’s higher education landscape, empowering students across the country to pursue their dreams without financial hindrances. This initiative builds upon previous efforts to enhance access to quality education and align with the vision of the National Education Policy (NEP) 2020, which called for greater financial assistance to meritorious students.
The scheme is a crucial step in India’s mission to increase access to quality higher education and contribute to the growth of skilled professionals and experts across various sectors.
