Prime Minister Shri Narendra Modi’s Union Cabinet has approved PM Vidyalaxmi, a new Central Sector program designed to give financial aid to deserving students so that no one is prevented from pursuing higher education by financial limitations. The National Education Policy, 2020, which suggested that financial aid be made available to deserving students through a variety of measures in both public and private HEIs, is the source of PM Vidyalaxmi, another significant initiative.
Any student who is accepted into a quality higher education institution (QHEI) under the PM Vidyalaxmi scheme is eligible to receive a loan from a bank or other financial institution that does not require collateral or guarantors in order to pay for all of their tuition costs and other course-related expenses. A straightforward, open, and student-friendly system that is fully digital and interoperable will be used to administer the program.
According to the NIRF rankings, the program will be available to the country’s highest-quality universities, including all government and private HEIs that place in the top 100 overall, category-specific, and domain-specific rankings; state government HEIs that place 101–200 in the NIRF; and all institutions under central government control. This list, which will be updated annually based on the most recent NIRF ranking, starts with 860 qualifying QHEIs, which covers over 22 lakh students who may be eligible for PM-Vidyalaxmi benefits if they so choose.
The student will also be eligible for a credit guarantee of 75% of outstanding default for loans up to ₹7.5 lakhs. This will assist banks in providing students enrolled in the program with education loans.
In addition to the aforementioned, students who earn up to ₹8 lakhs per year and are not eligible for any other government scholarships or interest subvention programs will also receive a 3 percent interest subvention for loans up to ₹10 lakhs during the moratorium period. Each year, one lakh students will receive interest subvention support. Students from government schools who have chosen technical or professional courses will be given preference. An investment of ₹3,600 Crore has been made between 2024–2025 and 2030–2031; it is anticipated that 7 lakh new students will benefit from this interest subsidy during that time.
Through a streamlined application process that can be used by all banks, students will be able to apply for education loans and interest subsidies through the Department of Higher Education’s unified portal, PM-Vidyalaxmi. E-vouchers and Central Bank Digital Currency (CBDC) wallets will be used to pay interest subsidies.
To maximize access to high-quality higher education for India’s youth, PM Vidyalaxmi will expand and deepen the range of initiatives implemented by the Indian government in the areas of education and financial inclusion over the previous ten years. This will support the Credit Guarantee Fund Scheme and Central Sector Interest Subsidy (CSIS) for
