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Recently, the Union Cabinet approved the PM Vidyalaxmi scheme, to provide financial support to meritorious students in their pursuit of higher education.

PM-Vidyalaxmi Scheme

It is a Central Sector scheme based on the National Education Policy, 2020, which had recommended financial assistance to meritorious students through various measures in both public and private Higher Education Institutions (HEIs). 

Under the scheme, any student who gets admission to a quality Higher Education Institution (QHEI) will be eligible to get collateral free, guarantor free loan from banks and financial institutions to cover the full amount of tuition fees and other expenses related to the course.

The scheme will apply to top-quality higher educational institutions (HEIs) in India, determined by the NIRF rankings. Eligibility includes:

  • All HEIs, both government and private, ranked within the top 100 in overall, category-specific, or domain-specific rankings.
  • State government HEIs ranked 101-200 in NIRF.
  • All central government institutions.

This list will be updated annually based on the latest NIRF rankings. Initially, 860 qualifying HEIs are covered, potentially benefiting over 22 lakh students through PM-Vidyalaxmi. 

Under the Scheme, for loans up to ₹7.5 lakhs, students will receive a 75% credit guarantee on outstanding defaults, encouraging banks to offer education loans.

Additionally, students with an annual family income up to ₹8 lakhs, not covered by other government scholarships or interest subvention schemes, are eligible for a 3% interest subvention on loans up to ₹10 lakhs during the moratorium period.

  • A similar scheme Central Sector Interest Subsidy (CSIS) also provides full interest subvention on loans up to Rs 10 lakh to students with an annual family income of up to Rs 4.5 lakh, pursuing technical or professional courses.

Students will be able to apply for the education loan as well as interest subvention, through a unified portal “PM-Vidyalaxmi”.

  • Payment of interest subvention will be made through E-vouchers and Central Bank Digital Currency (CBDC) wallets.

Scheme also supplements the Central Sector Interest Subsidy (CSIS) and Credit Guarantee Fund Scheme for Education Loans (CGFSEL), the two component schemes of Pradhan Mantri Uchchatar Shiksha Protsahan (PM-USP) Yojana being implemented by the Department of Higher Education. 

  • Pradhan Mantri Uchchatar Shiksha Protsahan (PM-USP) Yojana aims to provide financial assistance to meritorious students from poor families while pursuing higher studies.

Thus, PM Vidyalaxmi and PM-USP will together provide holistic support to all deserving students to pursue higher education in quality HEIs and technical/ professional education in approved HEIs. 

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