Cabinet approves easy education loan scheme for families with Rs 8 lakh income
PM-Vidyalaxmi scheme targets approximately 22 lakh students, enabling them to secure loans that cover the complete cost of tuition and related academic expenses
PTC Web Desk: The Union Cabinet has officially approved the PM-Vidyalaxmi scheme, designed to provide financial aid to meritorious students pursuing higher education in both public and private institutions across India. This initiative, announced on Wednesday, focuses on extending collateral-free and guarantor-free education loans to students who gain admission to one of the 860 top-tier Quality Higher Education Institutions (QHEIs) in the country.
The PM-Vidyalaxmi scheme targets approximately 22 lakh students, enabling them to secure loans that cover the complete cost of tuition and related academic expenses. These QHEIs include premier institutions under government and private management, ensuring broad accessibility.
A key feature of the scheme is its 75% credit guarantee on loans up to Rs 7.5 lakh, aimed at mitigating lenders’ risks and facilitating smoother loan approvals. This provision is intended to encourage financial institutions to provide more student loans.
Moreover, the scheme offers an interest subvention for students from families with an annual income of up to Rs 8 lakh, provided they do not benefit from other government scholarships or subsidies. Eligible students can avail a 3% interest subsidy on loans up to Rs 10 lakh during the moratorium period, which covers the timeframe between loan disbursement and the start of repayment.
Each year, the interest subvention is expected to support around 1 lakh students, prioritising those enrolled in technical or professional courses at government-run institutions. The scheme’s budget allocation stands at Rs 3,600 crore, covering the period from 2024-25 to 2030-31, with a projection that 7 lakh new students will gain from these benefits.
The PM-Vidyalaxmi scheme's goal is to make higher education more affordable and reduce the economic strain on students and their families. Eligible institutions include those within the top 100 of the National Institutional Ranking Framework (NIRF) for overall, category-specific, and domain-specific rankings. Additionally, state universities ranked between 101 and 200, as well as all centrally governed institutions, fall under the scheme’s coverage.