The Cabinet, led by Prime Minister Narendra Modi, has approved the launch of the PM Vidyalaxmi scheme, allocating Rs 3,600 crore for the years 2024-25 to 2030-31. The initiative is designed to benefit 7 lakh students annually, providing financial assistance for higher education in domestic institutions.
Under the scheme, students can avail loans up to Rs 10 lakh for their education, with a 3% interest subsidy and e-vouchers offered to 1 lakh students each year. Finance Minister Nirmala Sitharaman had announced the scheme in her Union Budget speech earlier this year.
The application process for loans and interest subsidies will be streamlined through the unified "PM-Vidyalaxmi" portal, allowing students to apply for benefits from participating banks with ease. The interest subsidy payments will be processed using E-vouchers and Central Bank Digital Currency (CBDC) wallets, ensuring a digital and transparent system.
PM Vidyalaxmi, a central sector initiative, aims to provide financial support to deserving students pursuing higher education. The scheme is rooted in the National Education Policy 2020, with a focus on quality Higher Education Institutions (QHEIs). It aims to facilitate access to collateral-free, guarantor-free loans, covering tuition fees and course-related expenses.
The program will cover top-ranking educational institutions based on the National Institutional Ranking Framework (NIRF), including the top 100 institutions across various categories, both government and private. State-run institutions ranked 101-200, as well as all central government institutions, are also eligible. The scheme could potentially benefit over 22 lakh students from 860 institutions annually, based on NIRF rankings.
For loans up to Rs 7.5 lakh, students will receive a 75% credit guarantee on outstanding defaults, encouraging banks to disburse loans under the scheme.
Additionally, students from families with an annual income of up to Rs 8 lakh, who do not qualify for other government scholarships or interest benefits, will receive a 3% interest subsidy during the moratorium period on loans up to Rs 10 lakh. This support is aimed at 1 lakh students annually, with a focus on those from government institutions pursuing technical and professional courses.