The Union Cabinet, chaired by Prime Minister Shri Narendra Modi, has approved PM Vidyalaxmi on Wednesday (November 6, 2024), a new Central Sector PM-Vidyalaxmi Scheme, a new initiative to offer financial assistance to deserving students.
This scheme aimed at ensuring that financial limitations do not prevent meritorious students from accessing higher education. This Central Sector scheme aligns with recommendations from the National Education Policy (NEP) 2020 to expand support for students in both public and private Higher Education Institutions (HEIs).
Accessible, Collateral-Free Loans for Top-Ranked Institutions
Under the PM Vidyalaxmi scheme, any student who gets admission in quality Higher Education Institution (QHEIs) will be eligible to get collateral free, guarantor free loan from banks and financial institutions to cover full amount of tuition fees and other expenses related to the course. Designed to be accessible and straightforward, the scheme will operate on a digital platform with a transparent and student-friendly application process.
Institutions Based on NIRF Rankings
The scheme is open to top institutions determined by the National Institutional Ranking Framework (NIRF) rankings, which include the top 100 HEIs across categories (public and private), state government institutions ranked 101-200, and all central government-run institutions.
Eligibility for PM-Vidyalaxmi Scheme
For loans up to ₹7.5 lakh, the scheme provides a 75% credit guarantee on defaults, enabling banks to confidently offer education loans to more students.
Additionally, students from families with an annual income of up to ₹8 lakh who do not benefit from other government scholarships or interest subsidies will receive a 3% interest subvention on loans up to ₹10 lakh during the moratorium period.
Each year, one lakh students will benefit from this interest relief, with preference given to those from government institutions and those enrolled in technical or professional courses.
With an allocation of ₹3,600 crore over the period from 2024-25 to 2030-31, the scheme is expected to support 7 lakh new students with interest subvention.
How to Apply for PM-Vidyalaxmi Scheme
The Department of Higher Education will oversee a unified “PM-Vidyalaxmi” portal where students can apply for education loans and interest subvention. The streamlined application will be accessible to all banks, and interest subvention payments will made through E-vouchers and Central Bank Digital Currency (CBDC) wallets, making the process both efficient and accessible. For this, application will have to made by visiting Vidyalakshmi portal https://www.vidyalakshmi.co.in/.
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