On Nov 26, 2024, the Union Cabinet approved the ‘PM-Vidyalaxmi Scheme’ to provide students with higher education loans through a simple, transparent, student-friendly and entirely digital application process.
PM-Vidyalaxmi is a key initiative stemming from the National Educational Policy 2020, aimed at providing financial support to meritorious students through diverse programs across public and private higher education institutions.
Under this scheme, any student who gets admission in a Quality Higher Education Institution (QHEI) will be eligible for a collateral-free loan from banks and financial institutions. This loan will cover the full tuition fee and additional course-related expenses easing financial barriers for students pursuing higher education.
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Benefits of Pm-Vidyalaxmi Scheme-
- A dedicated loan product will offer collateral-free and guarantor-free education loans accessible through a simple digital process.
- The Government of India will provide a 75% credit guarantee on loan amounts up to ₹ 7.5 lakhs, helping banks expand coverage for more students.
- Furthermore, for students with up to ₹ 8 lakhs annual family income, the scheme will also provide for a 3% interest subvention on loans up to ₹ 10 lakhs (during the moratorium period), but the student should not be eligible for benefits under any other government scholarship or interest subvention scheme.
- The interest subvention support will be provided to one lakh students annually. Priority will be given to the students enrolled in government institutions and those pursuing technical or professional courses.
- A budget allocation of ₹ 3,600 crore has been set for the period 2024-25 to 2030-31, with an expected 7 lakh new students benefiting from this interest subvention support during that time.
Which Educational Institutions Will Be Applicable?
- All higher educational institutions of the nation, as determined by the NIRF rankings – including all HEIs, government and private, that are ranked within the top 100 in NIRF in overall, category-specific and domain-specific rankings.
- State government HEIs ranked 101-200 in NIRF.
- All central government-governed institutions.
- There are 860 qualifying QHEIs covering more than 22 lakh students.
- The list will be updated every year using the latest NIRF ranking.
Application Process-
The Department of Higher Education is set to launch the “PM-Vidyalaxmi” portal, providing a unified platform where students can seamlessly apply for education loans and interest subvention. This centralized application process, adopted by all participating banks, aims to simplify access to financial support for students. Interest subvention payments will be efficiently disbursed through e-vouchers and Central Bank Digital Currency (CBDC) wallets, ensuring a secure and streamlined experience for beneficiaries.
More About the Portal-
Vidyalaxmi is a first-of-its-kind portal for students seeking educational loans. This portal has been developed under the guidance of the Department of Financial Services (Ministry of Finance), the Department of Higher Education (Ministry of Education) and the Indian Banks Association (IBA). The portal has been developed and is being maintained by Protean eGov Technologies Limited (formerly NSDL eGovernance Infrastructure Limited). Students can view, apply and track the education loan applications anywhere by accessing the portal.
What is PM-USP?
PM-Vidyalaxmi will supplement the Central Sector Interest Subsidy (CSIS) and Credit Guarantee Fund Scheme for Education Loans (CGFSEL), the two-component schemes of PM-USP (Pradhan Mantri Uchchatar Shiksha Protsahan), being implemented by the PM-USP CSIS, students with annual income up to Rs. 4.5 lakh and pursuing technical/professional courses from approved institutions get full interest subvention during the moratorium period for education loans up to Rs. 10 lakh in PM-USP.