- Union Cabinet, chaired by Prime Minister Narendra Modi, approved a new central sector scheme, ‘PM Vidyalaxmi’, on 6 November 2024. The scheme aligns with the objective of the National Education Policy 2020, which calls for providing financial assistance to meritorious students to pursue higher studies in public or private higher educational Institutions in India.
- The Department of Higher Education under the Union Ministry of Education will implement the PM Vidyalaxmi scheme.
- The department will also manage the unified portal “PM-Vidyalaxmi”. The eligible students will have to apply for educational loans and interest subvention on the portal.
Features of the PM Vidyalaxmi Scheme
- Students admitted to eligible public or private sector higher educational institutions will be eligible for collateral-free, guarantor-free loans from banks and financial institutions.
- The loan amount will cover the tuition fees and other expenses of the student.
- Under the scheme, loans up to Rs 7.5 lakhs will be eligible for a credit guarantee of 75% of the outstanding loan default amount. This means the government will reimburse the bank for 75% of the outstanding loan amount if the student who has taken the loan defaults.
Interest Subvention under the PM Vidyalaxmi Scheme
- Under the PM Vidyalaxmi scheme, an interest subvention (subsidy) of 3 per cent will be borne by the government for loans up to Rs 10 lakhs, provided to eligible students during the moratorium period (the period during which the student does not have to pay back the loan installment).
- Students whose family annual income is less than Rs 8 lakhs per annum and are not a beneficiary of other government scholarships or interest subvention schemes. Will be eligible.
- The government aims to provide interest subvention to one lakh students per year.
- The allocation for the interest subvention for 2024-25 to -2030-31 is Rs 3600 crore.
- The students who are enrolled in government educational institutions and pursuing professional /technical courses will be given preference.
- The government will reimburse the banks and financial institutions through E-vouchers and Central Bank Digital Currency (CBDC) wallets.