What’s in Today’s Article?

• About PM Vidyalaxmi Scheme (Objectives, Key Features, Funding Pattern, Supplementary Schemes, etc.)

About PM Vidyalaxmi Scheme:

• The Union Cabinet, led by Prime Minister Narendra Modi, has introduced the PM Vidyalaxmi Scheme—a new Central Sector initiative aimed at supporting meritorious students financially so they can pursue higher education without economic constraints.
• This scheme is rooted in the National Education Policy, 2020, which advocates for financial assistance to deserving students across both public and private Higher Education Institutions (HEIs).

Objectives of the Scheme:

• The PM Vidyalaxmi Scheme seeks to:
  • Ensure Financial Inclusion in Education: Enable meritorious students to pursue higher education without financial hurdles.
  • Support Top Educational Institutions: Applicable only to top-quality HEIs as per the National Institutional Ranking Framework (NIRF).
  • Provide Transparent and Digital Access: Use a fully digital, transparent, and student-friendly platform for loan processing and management.

Key Features of the Scheme:

• Loan Availability:
  • Eligibility: Any student who secures admission to a Quality Higher Education Institution (QHEI) is eligible.
  • Loan Terms: Collateral-free and guarantor-free loans will be offered through banks and financial institutions, covering the full amount of tuition and other course-related expenses.
  • Institutional Coverage: Applies to institutions ranked in the NIRF top 100 (both government and private) and state government HEIs ranked in the 101-200 bracket, as well as all central government institutions.
  • Coverage Scope: In the initial phase, 860 QHEIs qualify, potentially benefiting over 22 lakh students.
• Credit Guarantee Support:
  • For loans up to ₹7.5 lakhs, a 75% credit guarantee on the outstanding amount is provided, encouraging banks to make education loans accessible to more students.
• Interest Subsidy:
  • Eligibility: Students with an annual family income of up to ₹8 lakhs and not benefiting from other government scholarships or interest subvention schemes.
  • Subsidy Terms: A 3% interest subvention on loans up to ₹10 lakhs during the moratorium period.
  • Beneficiary Priority: Preference is given to students in government institutions and technical/professional courses.
• Budget and Reach:
  • An allocation of ₹3,600 crore has been set for 2024-25 to 2030-31, targeting interest subvention benefits for 1 lakh students each year and 7 lakh students over the scheme’s duration.
• Unified Digital Platform:
  • A “PM Vidyalaxmi” portal managed by the Department of Higher Education will provide a streamlined application process for education loans and interest subvention.
  • Payments will be made via E-vouchers and Central Bank Digital Currency (CBDC) wallets, ensuring a secure and efficient transfer of funds.

Supplementary Government Schemes:

• The PM Vidyalaxmi Scheme complements two key schemes under the PM-USP (Prime Minister’s Unique Scholarship Program):
  • Central Sector Interest Subsidy Scheme (CSIS): Offers full interest subvention during the moratorium for loans up to ₹10 lakhs to students from families with annual incomes up to ₹4.5 lakhs, specifically for technical/professional courses at approved institutions.
  • Credit Guarantee Fund Scheme for Education Loans (CGFSEL): Supports education loans with a guarantee fund.
• Together, PM Vidyalaxmi and PM-USP form a comprehensive financial support framework for eligible students, allowing them to access quality higher education and technical training in premier institutions.