Cabinet Approves PM-Vidyalaxmi Scheme for Financial Support to Meritorious Students
The Union Cabinet, led by Prime Minister Shri Narendra Modi, has recently given its nod to the PM-Vidyalaxmi scheme. This critical initiative aims to remove financial barriers that might prevent India’s youth from accessing quality higher education.
What Does the PM-Vidyalaxmi Scheme Entail?
The PM-Vidyalaxmi scheme provides robust support for students who secure spots in top-tier educational institutions. It ensures the availability of education loans for students enrolled in over 860 premier higher educational institutions, which could help more than 22 lakh students each year.
Key Features of the PM-Vidyalaxmi Scheme
Loan Accessibility: Students will find it easier to secure loans that cover full tuition and other academic expenses without needing collateral or guarantors.
Credit Guarantee: The government backs these loans with a 75% credit guarantee for amounts up to ₹7.5 lakhs, encouraging banks to lend more.
Interest Subvention: Families earning up to ₹8 lakhs annually will benefit from a 3% interest subvention on loans up to ₹10 lakhs during the moratorium.
This scheme is a part of a broader initiative that builds on a decade of reforms under the National Education Policy 2020. It targets students from highly ranked institutions according to the National Institutional Ranking Framework (NIRF), including both government and private sectors.
Important Information Table
| Details | Information |
|---|---|
| Scheme Name | PM-Vidyalaxmi Scheme |
| Approved By | Union Cabinet, chaired by Prime Minister Shri Narendra Modi |
| Target Audience | Students attending top 860 higher educational institutions |
| Coverage | Over 22 lakh students annually |
| Loan Features | Collateral-free, guarantor-free loans up to ₹7.5 lakhs |
| Credit Guarantee | 75% by the Government of India |
| Interest Subvention | 3% on loans up to ₹10 lakhs for families earning up to ₹8 lakhs |
| Application Platform | “PM-Vidyalaxmi” portal |
| Total Funding | ₹3,600 Crore from 2024 to 2031 |
| Main Objectives | To remove financial barriers in accessing quality higher education |
How Will Students Benefit?
Students will access a seamless, digital, and user-friendly application process through the “PM-Vidyalaxmi” portal. This system simplifies applying for loans across all banks and manages the distribution of benefits using E-vouchers and Central Bank Digital Currency (CBDC) wallets.
Additionally, the government has allocated ₹3,600 Crore from 2024 to 2031. This funding aims to support approximately 7 lakh new students with interest subvention throughout this period. It marks a strategic effort to enhance educational and professional opportunities for young Indians.
What Impact Does PM-Vidyalaxmi Hope to Achieve?
The PM-Vidyalaxmi scheme enhances the existing frameworks like the Central Sector Interest Subsidy (CSIS) and the Credit Guarantee Fund Scheme for Education Loans (CGFSEL). This comprehensive approach ensures that deserving students can pursue higher education in accredited institutions. It aligns with India’s goals of advancing education and promoting financial inclusion.
Here are the key points of the PM-Vidyalaxmi scheme, simplified for easy understanding:
Financial Support for Students: The Cabinet has approved the PM-Vidyalaxmi scheme to help meritorious students afford higher education without financial constraints.
Target Institutions: The scheme targets the top 860 higher educational institutions as per NIRF rankings, potentially benefiting over 22 lakh students annually.
Loan Features: Students can receive education loans that are collateral-free and guarantor-free up to ₹7.5 lakhs, with a straightforward, digital application process.
Government Backing: The Government of India will provide a 75% credit guarantee on loans up to ₹7.5 lakhs to encourage banks to offer more such loans.
Interest Subvention: Students with a family income of up to ₹8 lakhs can get a 3% interest subvention on loans up to ₹10 lakhs. Full interest subvention is available to those with a family income of up to ₹4.5 lakhs.
Digital Application and Management: The PM-Vidyalaxmi scheme will be managed through a unified portal, making the application process simpler and entirely digital.
This scheme is a part of the broader efforts under the National Education Policy 2020 to increase access to quality higher education in India.
This ambitious program underscores the Indian government’s commitment to investing in future leaders by making higher education more accessible and affordable. It represents a significant step towards empowering the next generation with the education they need to succeed.
