On November 6, the Union Cabinet, chaired by Prime Minister Narendra Modi, approved a new scheme called ‘PM Vidyalakshmi’.
This initiative aims to provide financial assistance to economically disadvantaged students seeking higher education.
Under this scheme, students can secure loans from banks and financial institutions without collateral.
Additionally, the government will offer subsidies on education loans to lessen the financial burden on these students.
Each year, the government supports over 22 lakh students and provides a credit guarantee of up to 75 percent for loans up to ₹7.5 lakh.
Priority will be given to families with an annual income of less than ₹8 lakh and those not beneficiaries of other government scholarships or interest subsidies.
During the moratorium period, these families will receive a 3 percent interest subsidy on loans up to ₹10 lakh.
The government plans to allocate ₹3,600 crore for this scheme from 2024-25 to 2030-31, which is expected to benefit hundreds of thousands of students, particularly those pursuing technical and professional courses.
How to Apply for an Education Loan: The Higher Education Department will launch an integrated portal called ‘PM-Vidyalakshmi.’
Through this portal, students can apply for education loans and interest subsidies via an application process available at all banks. The interest waiver will be processed through e-vouchers and the central bank digital currency wallet.
Highlights of the Scheme:
- The Government of India will provide a 75 percent credit guarantee on loans up to ₹7.5 lakh for higher education.
- Families with an annual income of ₹8 lakh will receive a 3 percent interest subsidy on loans up to ₹10 lakh.
- Students from families with an annual income of up to ₹4.5 lakh currently receive a full interest subsidy.
- The scheme aims to cover 22 lakh students nationwide from 860 major higher education institutions.
- PM Vidyalakshmi Yojana is an extension of the National Education Policy 2020.