PM-Vidyalakshmi Scheme: Union Finance Minister Nirmala Sitharaman informed Lok Sabha that the recently introduced Prime Minister Vidyalakshmi scheme is scheduled to be implemented by February 2025. The PM-Vidyalaxmi scheme was approved by the Union Cabinet in November in a bid to provide financial assistance to talented students pursuing higher education in public and private institutions. Under the scheme, students can access education loans for higher education in India.
Sitharaman announced that loans of up to Rs 7.5 lakh would be available with a 75% credit guarantee under the scheme. Furthermore, students from households earning up to Rs 8 lakh annually would be eligible for loans exceeding Rs 7.5 lakh for higher education. These loans up to Rs 10 lakh would receive a 3% interest subvention. Individuals with an annual income of up to Rs 4.5 lakh would receive full interest subvention.
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PM-Vidyalakshmi Scheme
The Union Cabinet approved the PM-Vidyalaxmi scheme in November with the aim of providing financial aid to talented students pursuing higher education at both public and private institutions. This initiative is intended to offer education loans to students enrolled at the top 860 Quality Higher Education Institutions (QHEIs) in India, without requiring any collateral or guarantors. These institutions include a range of government and private entities, ensuring access for a diverse student population.
The scheme has an allocated budget of approximately Rs 3,600 crore for the period spanning from 2024-2025 to 2030-31. It is designed to support 2.2 million students on an annual basis by providing loans of up to Rs. 7.5 lakh at favorable interest rates.
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Key details
The program will be open to the top Qualifying Higher Education Institutions (QHEIs) as determined by the National Institutional Ranking Framework (NIRF) rankings.
This will encompass all Higher Education Institutions (HEIs), regardless of government or private, that have been ranked within the top 100 in NIRF across overall, category-specific, and domain-specific rankings.
Furthermore, state government HEIs ranked between 101-200 in the NIRF rankings and all central government-run institutions will also qualify for the program.
The list of eligible institutions will be reviewed annually based on the most recent NIRF rankings. Initially, the scheme will cover 860 qualifying QHEIs.
It is estimated that the program will benefit over 2.2 million students, providing them with the opportunity to avail of the advantages offered by PM-Vidyalaxmi.
Students may be eligible to receive a 75% credit guarantee for any outstanding default on loan amounts up to Rs 7.5 lakhs.
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Loan Concession
Under this programme, students applying for loans up to Rs 7.5 lakh will receive a 75% credit guarantee, streamlining the approval and distribution process by banks and financial institutions. The goal of this initiative is to reduce financial risks for lenders and promote greater assistance for students.
The program includes interest subvention for students with a family income of up to Rs 8 lakh per year, who do not benefit from other government scholarships or interest subvention programs.
Eligible students will be granted a 3% interest subsidy on loans up to Rs 10 lakh during the moratorium period, which is the period between loan disbursement and the commencement of repayment.
Eligibility and application process
The programme is intended for students who have been accepted into one of India’s top 860 Quality Higher Education Institutions (QHEIs), whether they are private or government institutions as determined by the National Institutional Ranking Framework (NIRF).
Applicants may submit their loan applications via the PM-Vidyalakshmi portal, which is connected to various banks to provide a smooth and digital application process.
