The Union Cabinet, chaired by Prime Minister Narendra Modi, has launched the PM Vidyalaxmi scheme, a major initiative to financially support deserving students pursuing higher education. This new scheme aligns with the National Education Policy (NEP) 2020’s goal of expanding access to quality education by providing financial assistance to students based on merit.
Loans Made Accessible for Top Students
Under the PM Vidyalaxmi scheme, students admitted to top-ranking institutions in the National Institutional Ranking Framework (NIRF) are eligible for collateral-free, guarantor-free loans. The list of qualifying institutions includes the top 100 NIRF-ranked higher educational institutions (HEIs), as well as state government HEIs in the 101-200 NIRF range and all central government institutions. Starting with 860 institutions, this scheme could benefit over 22 lakh students, removing financial barriers to education.
Credit Guarantee and Interest Relief
For loans up to ₹7.5 lakh, the scheme offers a 75% credit guarantee to ease the financial burden on banks and ensure wider loan availability. Students from families with an annual income up to ₹8 lakh can also receive a 3% interest subvention on loans up to ₹10 lakh during the moratorium period. Each year, this interest subvention is expected to support around one lakh students, with preference given to students from government institutions pursuing technical or professional courses.
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Streamlined Access Through Digital Portal
The Department of Higher Education will introduce a unified, user-friendly portal called “PM-Vidyalaxmi.” Through this platform, students can apply for loans and interest support with ease, using a simplified application process accessible to all banks. Payments will be made using e-vouchers and digital currency wallets.
Enhancing Financial Inclusion and Educational Access
With an outlay of ₹3,600 crore through 2031, PM Vidyalaxmi strengthens India’s commitment to educational accessibility, complementing existing initiatives like the PM-USP Central Sector Interest Subsidy and Credit Guarantee Fund Scheme. By removing financial barriers, this scheme empowers students to pursue higher education in quality institutions, fostering a generation equipped for the challenges of the future.
