In a bid to make quality higher education more accessible, the Union Cabinet, chaired by Prime Minister Narendra Modi, has approved the PM Vidyalaxmi Scheme, designed to provide financial support to meritorious students across India.
The initiative aims to ensure that financial constraints no longer prevent any youth from pursuing higher education in the country’s top institutions, according to a PIB release.
Under the scheme, a mission-mode mechanism will facilitate the disbursement of collateral-free, guarantor-free loans to students enrolling in the top 860 quality higher educational institutions (QHEIs), benefiting over 22 lakh students annually.
A specially crafted loan product will be made available through a simple, transparent, and entirely digital application process. For loan amounts up to Rs 7.5 lakh, the Government of India will provide a 75% credit guarantee, helping banks extend loans with more confidence.
Additionally, students from families with an annual income of up to Rs 8 lakh will receive a 3% interest subvention on loans up to Rs 10 lakh during the moratorium period, in a move aimed at reducing the financial burden of higher education.
“…for students having an annual family income of up to Rs 8 lakh, and not eligible for benefits under any other government scholarship or interest subvention schemes, 3% interest subvention for loan up to Rs 10 lakh will also be provided during moratorium period. The interest subvention support will be given to one lakh students every year,” the release said.
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“Preference will be given to students who are from government institutions and have opted for technical/ professional courses. An outlay of Rs 3,600 crore has been made during 2024-25 to 2030-31, and 7 lakh fresh students are expected to get the benefit of this interest subvention during the period,” it said.
This builds on existing schemes offering full interest subvention to students from families earning up to Rs 4.5 lakh annually. Through PM Vidyalaxmi, the government seeks to strengthen its ongoing efforts to ensure quality higher education remains within reach for India’s youth.
The Department of Higher Education will have a unified portal ‘PM-Vidyalaxmi’ on which students will be able to apply for the education loan as well as interest subvention,
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