The Union Cabinet has approved the PM Vidyalaxmi scheme, aimed at ensuring that financial challenges do not hinder India’s meritorious students from accessing quality higher education. This new initiative, aligned with the National Education Policy 2020, provides collateral-free, guarantor-free loans to students who secure admissions in top-tier higher education institutions (HEIs). The scheme, which will cover over 22 lakh students across 860 institutions, is expected to expand access to education for students nationwide, including those attending public and private HEIs ranked by the National Institutional Ranking Framework (NIRF).
Under PM Vidyalaxmi, students can avail loans up to ₹7.5 lakhs, which will include a 75% credit guarantee from the Government of India. Additionally, students from families with an annual income of up to ₹8 lakhs will benefit from a 3% interest subvention on loans up to ₹10 lakhs. This interest relief will apply during the moratorium period and is expected to support approximately one lakh students annually, prioritizing those studying technical and professional courses, particularly in government institutions.
To streamline the loan process, PM Vidyalaxmi will operate through a unified digital portal managed by the Department of Higher Education. Students will be able to apply for loans and interest subsidies using a simplified, transparent system, with support delivered through E-vouchers and Central Bank Digital Currency (CBDC) wallets.
This initiative is an extension of India’s ongoing efforts to maximize educational access. Building upon the Central Sector Interest Subsidy Scheme (CSIS) and the Credit Guarantee Fund Scheme for Education Loans (CGFSEL) under PM-USP, PM Vidyalaxmi provides added financial support. PM-USP already offers full interest subvention on loans up to ₹10 lakhs for students with a family income under ₹4.5 lakhs. Together, these programs are designed to holistically support deserving students in pursuing higher education at premier institutions, furthering the government’s vision of financial inclusion and educational empowerment.
With an initial outlay of ₹3,600 crores for 2024-2031, PM Vidyalaxmi is poised to transform the landscape of higher education financing in India, breaking down financial barriers and enabling students to access top-tier educational opportunities.
