Synopsis:
- PM Vidyalaxmi offers collateral-free loans to students in top-ranked institutions, promoting equal educational opportunity.
- Families earning up to ₹8 lakhs can receive a 3% interest subsidy on loans up to ₹10 lakhs.
- Over 860 NIRF-ranked institutions are eligible, covering 22 lakh students, with annual updates.
- Applications and payments are fully digital, using e-vouchers and CBDC wallets.
- Targets 7 lakh new students by 2031.
Source: pmindia
The Indian Government, led by Prime Minister Narendra Modi, has launched the PM Vidyalaxmi scheme, an initiative under the National Education Policy 2020 to financially support meritorious students for higher education. This program offers financial aid to students to remove economic barriers and expand access to quality higher education.
Objective of PM Vidyalaxmi Scheme
PM Vidya Lakshmi Scheme primary goal is to empower capable students from all backgrounds by ensuring they have the means to pursue their higher education dreams, regardless of financial constraints. The scheme emphasizes accessibility, simplicity, and a fully digital application process for greater transparency.
Eligibility Criteria for PM Vidya Lakshmi Scheme
The Vidya Lakshmi Scheme is available to students who have been admitted to institutions ranked among the top 100 in the National Institutional Ranking Framework (NIRF). The scheme also includes public and private institutions, with an annual update of the list of eligible institutions based on NIRF rankings.
Eligibility for Subsidy: The scheme is open to students from families earning up to ₹8 lakhs annually, offering substantial interest subventions for loans.
Institutions Covered: Includes 860 NIRF-ranked institutions initially, with updates to the list every year.
PM Vidyalaxmi Scheme Loan and Financial Coverage
Under the PM Vidya Lakshmi Scheme, students are eligible for collateral-free loans for tuition and course-related expenses. The scheme provides:
- Loan Amount: Students can borrow up to the full cost of tuition and other course-related expenses.
- Credit Guarantee: For loans up to ₹7.5 lakhs, there is a 75% credit guarantee on outstanding defaults, making it easier for banks to approve loans.
Interest Subvention for Lower-Income Families
- Income-Based Support: For students whose family income is up to ₹8 lakhs annually, the scheme offers a 3% interest subvention on loans up to ₹10 lakh.
- Moratorium Period Benefit: This interest subvention applies only during the moratorium period.
- Beneficiaries: The subvention will assist one lakh students annually, prioritizing government institution students and those in technical or professional courses.
Unified Digital Platform for PM Vidya Lakshmi Scheme Application
- Application Portal: The Department of Higher Education will operate PM Vidya Lakshmi Scheme through a unified, interoperable digital portal where students can apply for both education loans and interest subventions.
- Payment Mode: Interest payments will be made through e-vouchers and Central Bank Digital Currency (CBDC) wallets, streamlining the process.
Complementary Schemes for Enhanced Access
In addition to the PM Vidya Lakshmi Scheme Scheme, students can benefit from other government initiatives such as:
- CSIS and CGFSEL: PM Vidya Lakshmi Scheme complements existing schemes like the PM-USP Central Sector Interest Subsidy (CSIS) and the Credit Guarantee Fund Scheme for Education Loans (CGFSEL), both offering support for students from lower-income families pursuing professional courses.
- Scope of Support: These combined efforts create a holistic support system for students across income groups, including full interest subventions for loans up to ₹10 lakh for eligible students from families earning up to ₹4.5 lakhs annually.
Financial Outlay and Expected Impact
The government has allocated ₹3,600 crore for the PM Vidyalaxmi Scheme from 2024 to 2031, with an expected impact on around 7 lakh new students by 2031. This will ensure that over 22 lakh students annually have access to loans and interest subsidies.
Difficult Word Explanations:
Subvention: A form of financial assistance or subsidy provided by the government to help reduce the cost of a service or loan.
Moratorium: A temporary suspension or delay in the payment of a debt or loan, typically until a specific time or condition is met.
Collateral-Free: A type of loan that does not require the borrower to provide any asset (like a house or car) as security for the loan.
Guarantor-Free: A loan that does not require someone else to promise to pay the debt if the borrower fails to do so.
