On November 6, 2024, the Union Cabinet approved the PM Vidyalaxmi Scheme, a Central Sector initiative designed to provide financial assistance to deserving students pursuing higher education.
PM Vidyalaxmi Scheme
- Objective: To remove financial barriers for meritorious students, ensuring equitable access to quality higher education.
- Eligibility: Students enrolled in the top 860 higher education institutions (HEIs) in India as per NIRF rankings, benefiting over 22 lakh students annually.
- Loan Features: Offers collateral-free, guarantor-free education loans through a user-friendly digital application process.
- Credit Guarantee: The government provides a 75% credit guarantee on loans up to ₹7.5 lakh, encouraging banks to increase lending.
- Interest Subvention:
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- Families earning up to ₹8 lakh annually receive a 3% interest subsidy on loans up to ₹10 lakh.
- Full interest subsidy is available for students from families earning up to ₹4.5 lakh under the PM-USP scheme.
- Complementary Schemes: Aligns with existing initiatives like CSIS and CGFSEL under PM-USP, offering extensive support for technical and professional courses in approved HEIs.
Key Differentiators of PM Vidyalaxmi Scheme
- Inclusive Income Coverage: Extends benefits to middle-income families (up to ₹8 lakh annual income), unlike earlier schemes targeting only low-income groups.
- Enhanced Interest Subvention: Provides a 3% subsidy during the moratorium period for loans up to ₹10 lakh, directly benefiting around 1 lakh students annually.
- Selective Institution Eligibility: Limits eligible institutions to the top 860 NIRF-ranked colleges and universities, moving away from broader criteria like NAAC or NBA accreditation.
- Focus on Quality: Prioritizes high-ranking institutions, ensuring a smaller pool of eligible institutions with better quality education.
- Streamlined Process: Utilizes the Vidyalaxmi portal for simplified loan applications, tracking, and integration with leading public and private banks.
- Funding and Impact: Allocates ₹3,600 crore from 2024-2031, aiming to support 22 lakh students.
This scheme represents a shift towards quality-focused financial aid, emphasizing simplicity, inclusivity, and targeted support for students in top institutions.
