PM Vidyalaxmi approved by Cabinet: Prime Minister Narendra Modi-led Cabinet on Wednesday approved the PM Vidyalaxmi scheme. The government has allocated Rs 3,600 crore for 2024-25 to 2030-31, aiming to assist 7 lakh new students with the new scheme.
The new scheme aims to provide loans of up to Rs 10 lakh for higher education in domestic institutions. The scheme will include a 3% interest subsidy and e-vouchers for one lakh students each year. The announcement for this was made by FM Nirmala Sitharaman in her Union Budget speech.
Students can apply for loans and interest benefits through the unified “PM-Vidyalaxmi” portal, utilizing a simplified application process across all banks. Interest support payments will be processed through E-voucher and Central Bank Digital Currency (CBDC) wallets.
What is the PM Vidyalaxmi scheme?
PM Vidyalaxmi is a new Central Sector initiative providing financial assistance to deserving students pursuing higher education.
- This program, developed from the National Education Policy 2020, aims to ensure that students admitted to quality Higher Education Institutions (QHEIs) can access collateral-free, guarantor-free loans covering tuition fees and course-related expenses. The implementation will occur through a digital, transparent, and student-friendly system.
- The program targets top-tier educational institutions, identified through NIRF rankings, including both government and private institutions ranked in the top 100 overall, category-specific, and domain-specific rankings.
- State government institutions ranked 101-200 and all central government institutions are also eligible. The annual updates based on NIRF rankings currently include 860 QHEIs, potentially benefiting over 22 lakh students.
- For loans up to Rs 7.5 lakhs, students will receive a 75% credit guarantee on outstanding defaults, encouraging banks to provide educational loans under this scheme.
- Students from families with annual income up to Rs 8 lakhs, who don’t qualify for other government scholarships or interest benefits, can receive 3% interest support during the moratorium period for loans up to Rs 10 lakhs.
This support targets one lakh students annually, prioritizing government institution students in technical/professional courses.