New Delhi: In a significant step toward making higher education more accessible for meritorious students, the Union Cabinet, chaired by Prime Minister Narendra Modi, has approved the PM Vidyalaxmi scheme. This new Central Sector scheme aims to provide financial support for students to pursue higher studies without facing financial constraints, as part of the initiatives recommended by the National Education Policy (NEP) 2020.
Under PM Vidyalaxmi, students admitted to quality Higher Education Institutions (QHEIs) will be eligible for collateral-free, guarantor-free loans from banks and financial institutions, covering the full cost of tuition and other course-related expenses. The scheme, accessible through a fully digital, student-friendly platform, is designed to streamline financial aid with transparency and ease of access.
Eligibility and Scope
The scheme targets top-ranked institutions as per the National Institutional Ranking Framework (NIRF), encompassing over 860 QHEIs, including both public and private institutions ranked within the top 100 in NIRF and state government institutions ranked between 101-200. Central government-governed institutions are also covered, creating an initial pool that supports more than 22 lakh students with potential access to PM Vidyalaxmi benefits.
For loan amounts up to ₹7.5 lakh, a 75% credit guarantee on outstanding defaults will be provided, enabling banks to offer education loans more confidently. Additionally, students from families with an annual income up to ₹8 lakh who are ineligible for other scholarships or interest subventions will receive a 3% interest subvention on loans up to ₹10 lakh during the moratorium period, benefitting approximately 1 lakh students annually.
Dedicated Outlay and Digital Portal
The scheme has an allocated outlay of ₹3,600 crore for the period from 2024-25 to 2030-31, with 7 lakh new students expected to receive interest subvention benefits during this time. Students can apply for loans and interest subvention through the unified PM-Vidyalaxmi portal, which will be used by all participating banks to ensure a simplified application process. The interest subvention will be managed via e-vouchers and Central Bank Digital Currency (CBDC) wallets.
Enhanced Financial Inclusion and Educational Access
PM Vidyalaxmi will supplement existing initiatives like the Central Sector Interest Subsidy (CSIS) and Credit Guarantee Fund Scheme for Education Loans (CGFSEL), both part of the PM-USP scheme. While PM-USP provides full interest subvention on loans up to ₹10 lakh for students from families earning up to ₹4.5 lakh annually, PM Vidyalaxmi will expand coverage and strengthen support for students across income levels pursuing higher education and technical courses in top-quality institutions.
As the government continues to prioritize educational access and financial inclusion, PM Vidyalaxmi stands as a transformative effort aimed at empowering youth to pursue higher education without financial hindrance, fulfilling India’s goal of inclusive growth and development.