Modi Government's Rs 3,600 Crore PM Vidyalaxmi Scheme To Provide Financial Support To Meritorious Students In Higher Education— All About It

Prime Minister Narendra Modi led Union Cabinet on Wednesday (6 November) approved the PM Vidyalaxmi scheme.

The Central sector scheme seeks to provide financial support to meritorious students so that financial constraints do not prevent anyone from pursuing higher studies, according to a government statement.

PM Vidyalaxmi is another key initiative stemming out of 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 higher educational institutions (HEIs).

Here are the key highlights of the scheme:

Objective: To eliminate financial barriers for meritorious students by providing full financial support for higher studies in recognized HEIs.

Coverage: The scheme targets students gaining admission to institutions that are among the top 200 in the National Institutional Ranking Framework (NIRF), including central, state, and private HEIs. Initially, 860 HEIs will qualify under the scheme, covering potentially more than 22 lakh students.

Financial Support: Eligible students will receive collateral-free and guarantor-free loans to cover tuition fees and other related expenses fully.

Credit Guarantee: For loans up to Rs 7.5 lakhs, a 75 per cent credit guarantee will be provided to reduce the risk for banks and facilitate the provision of education loans.

Interest Subvention: An interest subvention of 3 per cent will be offered for loans up to Rs 10 lakh during the moratorium period, applicable to students whose family annual income is under Rs 8 lakhs and who are not receiving benefits from any other government scholarship or subsidy schemes. This benefit is expected to assist one lakh students each year, with preference given to those enrolled in technical and professional courses at government institutions.

Funding: The scheme has an allocated budget of Rs 3,600 crore for the period from 2024-25 to 2030-31, aiming to support 7 lakh students during these years.

Application Process: Applications for both education loans and interest subvention can be submitted through Department of Education's unified and student-friendly digital portal called “PM-Vidyalaxmi.”

Digital Payments: The scheme will utilise modern financial tools such as E-voucher systems and Central Bank Digital Currency (CBDC) wallets for payment of interest subvention.

PM Vidyalaxmi will supplement the Central Sector Interest Subsidy (CSIS) and Credit Guarantee Fund Scheme for Education Loans (CGFSEL) being implemented by the Department of Higher Education. 

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