PM Vidyalaxmi Scheme: Financial Aid for Higher Education

PM Vidyalaxmi Scheme: Financial Aid for Higher Education

Sub: Schemes

Sec: Education

Why in News

The Union Cabinet, recently approved the PM Vidyalaxmi Scheme, a new Central Sector initiative aimed at supporting meritorious students with financial assistance for higher education. This scheme is set to provide collateral-free loans to students, covering their tuition and other educational expenses.

About PM Vidyalaxmi Scheme:

The scheme will operate in a mission mode to facilitate the provision of education loans for students admitted to top 860 Quality Higher Education Institutions (QHEIs) across the country.

It aims to cover over 22 lakh students annually, helping them access affordable, quality education without financial barriers.

Eligibility and Target Institutions

Students admitted to QHEIs, which include both government and private institutions, are eligible for the scheme.

The list of eligible institutions will be updated annually based on the National Institutional Ranking Framework (NIRF) rankings, including:

• All HEIs within the top 100 NIRF rankings (overall, category-specific, and domain-specific).
• State government HEIs ranked between 101-200.
• All centrally governed

Loan Features and Amount

All eligible students can access loans without the need for collateral or a guarantor. The loan covers the full tuition fees and other related educational expenses.

75% Credit Guarantee: For loans up to ₹7.5 lakh, the Government of India will provide a 75% credit guarantee to support banks in extending education loans.

Interest Subvention Provisions

For Students with Annual Family Income up to ₹8 lakh: A 3% interest subvention will be provided on loans up to ₹10 lakh during the moratorium period (covering interest payments while in school), for students who are not beneficiaries of other government scholarships or interest subvention schemes.

For Students with Annual Family Income up to ₹4.5 lakh: Under the Central Sector Interest Subsidy (CSIS) component of PM-USP, students pursuing technical/professional courses in approved institutions can receive full interest subvention on loans up to ₹10 lakh during the moratorium period.

Implementation Mechanism

The Department of Higher Education will manage a unified portal, “PM-Vidyalaxmi,” for loan applications and interest subvention requests.

The process will be fully digital, transparent, and user-friendly, enabling students to apply through an interoperable system.

Interest subvention payments will be facilitated through E-vouchers and Central Bank Digital Currency (CBDC) wallets.

Financial Allocation: The government has allocated ₹3,600 crore for the scheme, covering the period from 2024-25 to 2030-31.

Integration with Existing Government Schemes

The PM Vidyalaxmi Scheme will supplement the Central Sector Interest Subsidy (CSIS) and Credit Guarantee Fund Scheme for Education Loans (CGFSEL), both part of PM-USP, providing a comprehensive support framework for students seeking higher education.

This integration with PM-USP expands the financial support system, offering holistic aid for meritorious students in quality HEIs.