NEW DELHI: To make quality higher education more accessible to India’s middle-class youth, the Union Cabinet on Wednesday approved the PM Vidyalakshmi Scheme, which is designed to ease financial burden of students from families with an annual income below Rs 8 lakh.
Under this scheme, eligible students will be able to secure collateral-free and guarantor-free education loans of up to Rs 10 lakh, backed by an interest subsidy.
It aims at simplifying the education loan process for students admitted to institutions ranked under the National Institutional Ranking Framework (NIRF), including the top 860 Quality Higher Education Institutions (QHEIs). With an initial outlay of Rs 3,600 crore for two years, the scheme is expected to impact up to 22 lakh students annually. In a post on X, PM Narendra Modi said, “This scheme is a big boost to making education more accessible. It empowers the Yuva Shakti, building a brighter future for our nation.”
The scheme’s impact will be felt especially among students at central and state govt institutions and private institutions ranked in the NIRF’s top 200. A unified portal will streamline the application process, allowing students to access both the loan and interest subsidy through a simple digital platform.
Education minister Dharmendra Pradhan lauded the scheme, highlighting its potential to empower millions of students by addressing financial constraints that have previously hindered access to quality higher education. “PM Vidyalakshmi will maximize access to higher education for meritorious students, ensuring that financial barriers do not prevent students from achieving their goals,” he stated.
Under PM Vidyalakshmi, students only need to pay interest during their study period. For loans up to Rs 7.5 lakh, the scheme provides a 75% credit guarantee on outstanding defaults, supporting banks in providing loans. In addition, eligible students will receive a 3% interest subsidy during the moratorium period, giving priority to those enrolled in technical and professional courses. If the family income is below Rs 4.5 lakh, there is no upper limit for interest subvention.
Spanning from 2024-25 to 2030-31, the scheme is expected to benefit seven lakh fresh students annually, providing a much-needed financial lifeline for the aspiring youth.