HYDERABAD: The Union Cabinet, chaired by Prime Minister Narendra Modi, has approved PM Vidyalaxmi, a new Central scheme that seeks to provide financial support to meritorious students for higher studies.
PM Vidyalaxmi is a key initiative of the National Education Policy 2020 which has recommended making financial assistance available to meritorious students.
Under the scheme, any student who gets admission in quality Higher Education Institution (QHEIs) will be eligible to get collateral-free and guarantor-free loans from banks and financial institutions to cover full amount of tuition fees and other expenses related to the course.
The scheme will be administered through a simple, transparent and student-friendly digital system.
The scheme will be applicable to the top quality HEIs, as determined by the NIRF rankings —all government and private HEIs ranked within the top 100 in NIRF in overall, category-specific and domain specific rankings; state government HEIs ranked in 101-200 in NIRF and all Central government institutions.
This list will be updated every year using the latest NIRF ranking, and to begin starts with 860 qualifying QHEIs, covering more than 22 lakh students.
For loan amount up to Rs. 7.5 lakh, a student will be eligible for a credit guarantee of 75% of the outstanding default. This will give support to banks in making education loans available to students.
For students having an annual family income of up to Rs. 8 lakh, and not eligible for benefits under any other government scholarship or interest subvention schemes, 3% interest subvention for loan up to Rs, 10 lakh will also be provided during moratorium period.
To go to the web portal of PM Vidyalaxmi, click here.
Interest subvention support
The interest subvention support will be given to 1 lakh students every year. Preference will be given to students from government institutions and have opted for technical/ professional courses. An outlay of Rs. 3,600 crore has been made during 2024-25 to 2030-31 financial years, and 7 lakh fresh students are expected to stand to benefit during the period.
The Department of Higher Education will have a unified portal “PM-Vidyalaxmi” on which students can apply for education loan and interest subvention, through a simplified application process to 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 further enhance the scope. It will supplement the Central Sector Interest Subsidy (CSIS) and Credit Guarantee Fund Scheme for Education Loans (CGFSEL), the two component schemes of PM-USP, being implemented by the Department of Higher Education.
PM-USP CSIS
Under the PM-USP CSIS, students with annual family income up to Rs. 4.5 lakh and pursuing technical or professional courses from approved institutions get full interest subvention during moratorium period for education loans up to Rs. 10 lakh.
PM Vidyalaxmi and PM-USP will together provide holistic support to students to pursue higher education in quality HEIs and technical/ professional education in approved HEIs.