The Union Cabinet has approved the PM Vidyalaxmi scheme to provide financial support to deserving students across India. The program is expected to benefit over 22 lakh students annually by offering collateral-free loans and interest subsidies to ease the financial burden of pursuing higher education.
The PM Vidyalaxmi scheme offers multiple financial benefits to support students pursuing higher studies. According to the Union Cabinet Official Statement, students who secure admission in one of the 860 top-ranking higher educational institutions in India can avail of education loans without needing to provide collateral or a guarantor. This aims to make quality education accessible to students from various backgrounds.
For students from economically weaker families (with an annual income of up to ₹8 lakh), the government will provide a 3% interest subvention on loans up to ₹10 lakh. This interest relief will lessen the financial burden on families struggling to cover higher education costs.
To encourage banks to offer education loans, the government will provide a 75% credit guarantee on loans up to ₹7.5 lakh. This assurance is designed to make banks more willing to lend to students and reduce risk.
As per the Indian Express report, the scheme is available to students admitted to the top 860 institutions per the National Institutional Ranking Framework (NIRF). This criterion ensures that students attending reputable institutions are prioritised for support. Preference will be given to students from government institutions enrolled in technical or professional courses, aligning with the government’s focus on skill development and employability.
The PM Vidyalaxmi scheme will be implemented through a fully digital platform, ensuring a streamlined and accessible process for applicants. This digital approach minimises paperwork and makes application processes faster and more convenient. Digital e-vouchers and Central Bank Digital Currency (CBDC) wallets will manage interest subvention payouts, enhancing transparency and efficiency.
This scheme seeks to dismantle financial barriers to higher education, particularly for students from economically disadvantaged backgrounds, fostering educational equity and empowering India's youth. By providing critical support for tuition and other education-related costs, the scheme will unlock opportunities for future leaders and contribute to India’s progress as an educated, skilled nation. The PM Vidyalaxmi scheme is being viewed as a game-changer in India’s higher education sector, with its potential to create a more inclusive educational landscape.