Cabinet approves PM-Vidyalaxmi scheme to provide financial support to meritorious students so that financial constraints do not prevent any youth of India from pursuing quality higher education

The Union Cabinet, led by Prime Minister Mr. Narendra Modi, has approved the PM Vidyalaxmi scheme, a Central Sector initiative designed to provide financial support to meritorious students, ensuring that financial constraints do not hinder their pursuit of higher education. This initiative stems from the National Education Policy 2020, which recommended financial assistance for deserving students across public and private Higher Education Institutions (HEIs). Under the scheme, students admitted to quality HEIs, as determined by the National Institutional Ranking Framework (NIRF), are eligible for collateral-free and guarantor-free loans to cover tuition fees and other course-related expenses. The scheme will be administered through a transparent, digital, and student-friendly system.

The PM Vidyalaxmi scheme will apply to top-ranking HEIs, including government and private institutions ranked within the top 100 in the NIRF overall, category-specific, and domain-specific rankings, as well as state government HEIs ranked between 101 and 200 in NIRF. The scheme will initially benefit over 22 lakh students from 860 qualifying institutions and includes a 75% credit guarantee for loans up to US$ 8,896.06 (Rs. 7.5 lakh). Additionally, students with a family income of up to US$ 9,489.13 (Rs. 8 lakh), who are not eligible for other government scholarships, will receive a 3% interest subvention on loans up to US$ 11,861.41 (Rs. 10 lakh) during the moratorium period. An allocation of US$ 427 million (Rs. 3,600 crore) has been set for FY23 to FY31, aiming to provide interest subvention to seven lakh students. The unified PM Vidyalaxmi portal will facilitate the application process for education loans and interest subvention, ensuring ease of access and transparency.

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.