Ashwini Vaishnaw.
Credit: PTI File Photo
New Delhi: The Union Cabinet on Wednesday approved the PM-Vidyalaxmi scheme to provide financial support to meritorious students who face financial constraints in pursuing quality higher education.
Making the announcement at the press briefing, Union minister Ashwini Vaishnaw said that the scheme will be helpful for the middle class.
“This scheme will ensure no meritorious student is denied higher education due to financial constraints. Under this scheme, in a very simple and transparent method, collateral free and guarantor free loan of upto Rs 10 lakhs with a good interest subsidy in a very convenient manner will be provided if the family income is less than Rs 8 lakhs,” the minister announced.
The ministry of education, in a release, said that the scheme will be applicable to students in higher educational institutions which have proven their quality. This includes all higher education institutions ranked within the top 100 in the National Institutional Ranking Framework (NIRF) rankings, state government institutions ranked 101-200 in NIRF rankings, as well as all central government governed institutions.
Initially, 860 qualifying institutions will be included, covering more than 22 lakh students. “For loan amount up to Rs 7.5 lakhs, the student will also be eligible for a credit guarantee of 75 per cent of outstanding default. This will give support to banks in making education loans available to students under the scheme,” the ministry said in a release.
The prime minister lauded the scheme. “The Cabinet has approved the PM-Vidyalaxmi scheme to support youngsters with quality education. It is a significant step towards empowering the Yuva Shakti and building a brighter future for our nation,” he posted on X.
Apart from the students who come under the ambit of the scheme, the government has also extended the scheme to 1 lakh more students per year with an annual family income of up to Rs 8 lakhs who are not eligible for benefits under any other government scholarship or interest subvention schemes. For them, the scheme allows for 3 per cent interest subvention for loan up to Rs 10 lakhs during the moratorium period. Preference will be given to students from government institutions who have opted for technical and professional courses.
An outlay of Rs 3,600 crore has been set aside during 2024-25 to 2030-31, and the government said that 7 lakh students are expected to get the benefit of this interest subvention during this period.