New Delhi: The Cabinet Wednesday approved PM-Vidyalaxmi, a new central government initiative aimed at providing financial support to meritorious students for pursuing higher education at 860 of the country’s top institutions.
First proposed in the budget presented by Union Finance Minister Nirmala Sitharaman in July, PM-Vidyalaxmi is expected to benefit over 22 lakh students annually.
According to a statement issued Wednesday, any student who gets admission to a quality higher education institution (HEI) recognised by the Union Ministry of Education, will be eligible to get a “collateral free”, “guarantor free” loan from banks or financial institutions to cover the full amount of tuition fees and other expenses related to the course.
An outlay of Rs 3,600 crore over a period of seven years (FY 2024-25 to FY 2030-31) has been made for the scheme, which will be administered digitally.
“PM-Vidyalaxmi is another key initiative stemming from the National Education Policy, 2020, which had recommended that financial assistance should be made available to meritorious students through various measures in both public and private HEIs,” read the statement issued Wednesday.
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Provisions under PM-Vidyalaxmi
The PM-Vidyalaxmi initiative offers educational loans and interest subvention for families with annual income of up to Rs 8 lakh.
According to the government statement, for loans up to Rs 7.5 lakh, the student will also be eligible to avail of a 75 percent credit guarantee by the Government of India, to support banks expand coverage.
Besides, for students having an annual family income of up to Rs 8 lakh, and not eligible for benefits under any other government scholarship or interest subvention schemes, 3 percent interest subvention for loan up to Rs 10 lakh will also be provided during moratorium period. “The interest subvention support will be given to one lakh students every year. Preference will be given to students who are from government institutions and have opted for technical/ professional courses,” the statement read.
Every year, the central government’s department of higher education will prepare a list of 860 quality higher education institutions. This will include institutions ranked within the top 100 in NIRF in overall, category-specific and domain specific rankings; state government HEIs ranked in 101-200 in NIRF and all central government–run institutions.
The ministry will also launch an online unified portal “PM-Vidyalaxmi” through which students will be able to apply for the education loan as well as interest subvention, by means of a simplified application process.
“The scheme will be administered through a simple, transparent and student-friendly system that will be inter-operable and entirely digital … Payment of interest subvention will be made through E-voucher and Central Bank Digital Currency (CBDC) wallets,” the government said.
Calling it a bid to universalize access to higher education, Education Minister Dharmendra Pradhan in a post on ‘X’ wrote, “Hon’ble PM @narendramodi ji’s approval to #PMVidyalaxmi with an outlay of ₹3,600 crore will remove obstacles to higher education and enable our yuva shakti to pursue their dreams. Collateral-free and guarantor-free education loans under PM Vidyalaxmi will maximise access to higher education for meritorious students and ensure that financial constraints do not prevent students from pursuing education.”
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