NEW DELHI, Nov 7: The Union Cabinet, under the leadership of Prime Minister Narendra Modi, has approved the PM Vidyalaxmi scheme, a new Central Sector initiative to financially support students seeking higher education. This scheme allows students accepted into Quality Higher Education Institutions (QHEIs) to access collateral-free, guarantor-free loans from banks and financial institutions, covering full tuition fees and related costs.
Eligibility for the scheme includes institutions ranked among the top 100 in the National Institutional Ranking Framework (NIRF) across various categories. State government institutions ranked between 101 and 200 in NIRF, along with all central government institutions, are also eligible. This initiative currently covers 860 institutions, potentially benefiting over 22 lakh students each year.
For loan amounts up to ₹7.5 lakh, the government will provide a 75% credit guarantee, assisting banks in offering loans to students. Additionally, students with an annual family income of up to ₹8 lakh who are not benefiting from other government scholarships or interest subvention schemes can receive a 3% interest subvention on loans up to ₹10 lakh during the moratorium period. This benefit will be provided to 1 lakh students each year, with priority given to those from government institutions and those pursuing technical or professional courses.
The government has allocated ₹3,600 crore for the scheme from 2024-25 to 2030-31, aiming to support 7 lakh new students with interest subvention.
A dedicated portal, “PM-Vidyalaxmi,” will enable students to apply for loans and interest subvention with a streamlined, fully digital process used by all participating banks. Payments will be processed through e-vouchers and Central Bank Digital Currency (CBDC) wallets.
