NEW DELHI: The Union Cabinet has approved a new initiative, the PM Vidyalaxmi scheme, aimed at providing financial assistance to meritorious students who face financial barriers to pursuing higher education.

Union Minister Ashwini Vaishnaw shared details of the scheme on Wednesday (November 6, 2024), explaining that it is designed to "empower youth and the middle class."

Under this scheme, any student who secures admission to a recognized higher education institution will be eligible for education loans. These loans will be collateral-free and guarantor-free, ensuring easy access to funding.

Each year, the scheme will cover up to one lakh students. Students from families with an annual income of up to Rs 8 lakh will be eligible for a three percent interest subvention on loans up to Rs 10 lakh. Additionally, students from families with an income of up to Rs 4.5 lakh will receive full interest subvention.

The government has emphasized that no deserving student will be denied the opportunity for higher education due to financial constraints. The Department of Higher Education will compile a list of top-quality institutions each year. This list will include the top 100 ranked institutions in overall or category-specific NIRF rankings, the top 200 ranked institutions by state or UT governments, and all other institutions recognized by the government.

Loan applications will be processed, approved, and disbursed through the PM Vidyalaxmi portal. Loans up to Rs 7.5 lakh will also be eligible for a 75% credit guarantee on outstanding defaults.

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