New Delhi. Asal Baat news. The Pradhan Mantri Vidyalaxmi Scheme is a flagship initiative of the Education Ministry that seeks to make qu...
Bridging Financial Barriers to Higher Education
India has witnessed rapid expansion in higher education enrolment over the last decade, with the Gross Enrolment Ratio (GER) rising from 23.7% in 2014-15 to 30.0%in 2023-24. However, for many meritorious students, access to quality higher education in the top-ranked institutions of the country often remains difficult due to financial constraints. Many try to fill the gaps through education loans, but there are many more who cannot afford the high interest rates on these loans. The dreams of these students to study in IITs, IIMs and many other top-ranked institutions of the country remain unfulfilled despite their merit. The PM Vidyalaxmi Scheme (PM-Vidyalaxmi), approved by the Union Cabinet on 6th November 2024, comes to the aid of such students. This is a mission-mode intervention under which collateral-free, guarantor-free education loans are provided to students who have got admission on their own merit to one of the designated Quality Higher Educational Institutions (QHEIs) in the country. A 3% interest subvention is also provided for students with annual family income up to ₹8,00,000. The entire process for getting these loans is simple, transparent, student-friendly and entirely digital. There is a unified portal through which students can apply for education loans, track the status of their applications, claim interest subvention and also raise grievances.
The scheme stems from the National Education Policy (NEP), 2020, which recommends that financial assistance should be made available to meritorious students through various measures for studies in both public and private Higher Education Institutions (HEIs). The objective is to ensure that lack of finance does not prevent any meritorious student from studying in the best institutions in the country. PM-Vidyalaxmi positively contributes to the goals of SDG 4 and NEP 2020by advancing inclusive and equitable quality education and promoting lifelong learning opportunities for all.
Features, Benefits and Coverage
PM-Vidyalaxmi provides collateral-free and guarantor-free education loans for students admitted on their own merit to designated QHEIs in the country. Currently, 1,425 QHEIs are covered under the scheme, including both public and private institutions. Management quota, NRI quota, etc. admissions will not get this benefit.
Loans up to ₹ 7.5 lakhs are provided 75% credit guarantee by Government of India, to support banks to expand coverage. For students with up to ₹ 8 lakhs annual family income, the scheme provides for 3% interest subvention on loans up to ₹ 10 lakh. This is in addition to the full interest subvention already offered to students with up to ₹ Rs. 4.5 lakhs annual family income.
Collateral-free, Guarantor-free Education Loans
Students admitted to eligible QHEIs can obtain education loans without furnishing collateral or third-party guarantees under PM-Vidyalaxmi. There is no cut-off on highest amount of education loan. It will depend on course fee and other fees charged by the QHEI and other associated expenses (like mess, hostel fee, other refundable and non-refundable fees of the QHEI, cost of a reasonable quality laptop and reasonable amount of living expenses required by the student during the course period) and students from all income categories are eligible to apply.
To encourage lending institutions to extend loans to students, the Government provides a 75% credit guarantee for loans up to ₹7.5 lakh. This significantly reduces lender risk and improves loan accessibility.
The interest rates charged on the educational loan under the scheme will be capped at the individual bank’s Externally Benchmarked Lending Rate (EBLR) + 0.5%. The rate will always be less than the interest rate charged by the bank on other education loans not covered under PM-Vidyalaxmi. The repayment period of the education loan is up to 15 years, excluding a moratorium period of the course period plus one year. The loan is available for all degree /diploma programmes in India and there is no limit on the number of students getting such loans. The educational loans are provided through Scheduled Banks, Regional Rural Banks (RRBs), and Cooperative Banks participating in the scheme.
Interest Subvention
PM-Vidyalaxmi supplements the PM-USP CSIS (Pradhan Mantri Uchchatar Shiksha Protsahan Central Sector Interest Subsidy Scheme). Under PM-USP CSIS, students who are pursuing technical/ professional courses from approved NAAC accredited HEIs/ NBA accredited courses and whose annual family income is up to ₹4.5 lakhs, shall be eligible for 100% interest subvention during moratorium period for education loan up to ₹ 10 lakhs.
PM-Vidyalaxmi interest subvention scheme’s coverage is broad-based and includes all courses at designated Quality Higher Educational Institutions (QHEIs). Under the scheme, interest subvention of 3% on loans up to ₹ 10 lakhs is awarded during the moratorium period (course period plus one year) to those meritorious students whose family’s annual income is less than ₹8,00,000.
If the education loan amount is more than ₹ 10 lakhs, interest subvention is provided for the disbursed total principal amount of the loan up to ₹ 10 lakhs only.
Student availing any other Central /State Government Scholarship or any other interest subvention scheme or Fee reimbursement shall not be eligible for availing interest subvention benefits under CSIS or PM-Vidyalaxmi.
In a year, a maximum of one lakh students shall be eligible for 3% interest subvention during the moratorium period. No such limit is for CSIS beneficiaries.
Understanding Interest Subvention under PM-USP CSIS and PM-Vidyalaxmi – available on PM-Vidyalaxmi Portal:
The scheme offers affordable education loans with interest rates capped at the bank's Externally Benchmarked Lending Rate (EBLR) + 0.5%. In addition, banks may provide up to 1% additional interest concession to the borrowers if the interest is serviced during the study and the moratorium period. The scheme also provides tax benefits on the interest paid under Section 80E.
Interest subvention and credit guarantee benefits are available only once for undergraduate, postgraduate, or integrated courses. The Government has allocated a budget of ₹ 3,600 Crores from 2024-2025 to 2030-2031 for the scheme. 7 lakh fresh students are expected to get the benefit of this interest subvention during the seven-year period.
Eligibility Criteria for Students
- The scheme is available to students who have secured merit-based admission through competitive exams in any of the designated Quality Higher Education Institutions (QHEIs) in India.
- The scheme provides education loans for all degree and diploma courses.
- The repayment period of the education loan would be up to 15 years excluding the moratorium period (course period + 1 year).
- To avail all these benefits, students are required to register through Aadhaar, remain enrolled in their courses, and maintain a satisfactory academic performance.
"
"
" alt="" />
" alt="" />
.jpeg)
