PM Vidyalaxmi Scheme: In a significant move to support students in pursuing higher education, the Union Cabinet, chaired by Prime Minister Narendra Modi, has approved a new Central Sector Scheme, PM Vidyalaxmi, on November 6, 2024. This scheme aims to provide financial support to academically proficient students across India by facilitating access to education loans that cover tuition fees and related expenses. The scheme, specifically designed for students admitted to top-tier Quality Higher Education Institutions (QHEIs), offers collateral-free, guarantor-free loans, making higher education more accessible for meritorious students nationwide.
Key Highlights of PM Vidyalaxmi Scheme:
1. Loan Benefits for Students Admitted to Top Institutions
•The scheme primarily benefits students who secure admission to any of the 860 government or private institutions classified as Quality Higher Education Institutions (QHEIs). This includes institutions within the top 100 of the National Institutional Ranking Framework (NIRF) rankings in various categories, state-run HEIs ranked between 101 and 200, and all Central government-governed institutions.
•Under this scheme, students can obtain loans without collateral or the need for a guarantor, helping them cover the complete tuition fees and other necessary expenses for their courses.
2. Comprehensive Coverage of Educational Loans
•The PM Vidyalaxmi Scheme has been developed to potentially cover up to 22 lakh students in its initial stages, allowing access to easy educational loans from banks and financial institutions.
3. Loan Guarantee for Loans up to ₹7.5 Lakh
•For loans up to ₹7.5 lakh, the scheme provides a 75% credit guarantee. This guarantee encourages banks to approve loans to students by reducing the financial risk involved, enhancing students’ chances of obtaining loans without additional financial pressure on their families.
4. Interest Subvention for Students with Lower Family Incomes
•Students from families with an annual income of up to ₹8 lakh who are not eligible for any other government scholarship or interest subvention schemes can benefit from a 3% interest subvention on loans up to ₹10 lakh during the moratorium period. The moratorium period is typically the duration of the course plus an additional time frame (usually six months to a year) after course completion, providing students time to secure employment before starting repayment.
•The interest subvention will be extended to one lakh students annually, with a special preference for students enrolled in technical or professional courses at government institutions.
5. Financial Outlay and Future Projections
•An initial outlay of ₹3,600 crore has been allocated for the period from 2024-25 to 2030-31. During this period, approximately 7 lakh fresh students are expected to benefit from the interest subvention feature of the scheme. This funding reflects the government’s commitment to making quality higher education accessible and affordable for meritorious students across various socioeconomic backgrounds.
Eligibility Criteria for PM Vidyalaxmi Scheme
To be eligible for the PM Vidyalaxmi Scheme, students must meet the following criteria:
•Admission to one of the top 860 QHEIs, which include government and private institutions ranked in the top 100 of NIRF or Central government institutions.
•Family income not exceeding ₹8 lakh annually to avail of the 3% interest subvention on loans up to ₹10 lakh.
•Must not already be benefiting from other government scholarships or interest subvention programs.
Benefits and Advantages of the PM Vidyalaxmi Scheme
The scheme’s focus on education loans without collateral and interest subvention aims to alleviate financial constraints faced by students, especially those from economically weaker sections. By extending these benefits to students in top institutions nationwide, the government encourages educational inclusivity and economic mobility. It allows talented students to pursue higher education without financial restrictions, contributing to a more skilled and educated workforce.
The preference for students in technical and professional courses and institutions ranked in NIRF’s top listings is designed to ensure that financial assistance is directed towards students in fields with high employability potential, thereby aligning with the government’s broader goals of economic development and skill enhancement.