PM Vidyalaxmi Scheme - Govt's Next Step in Financial Aid for Education

Strengthening the existing efforts to elevate education levels across the country, and bridging the accessibility gap, the Government of India launched its new PM-Vidyalaxmi scheme as an effort to provide education loans to students inclined towards pursuing higher education courses. Let’s read more about the scheme.

A Brief on PM-VIDYALAXMI

The PM-Vidyalaxmi scheme is a centrally sponsored scheme complementing the ongoing PM-USP consisting of PM-CSIS and PM-CGFSEL schemes, administered by the Department of Higher Education, and is launched with the aim of offering financial assistance to students for pursuing higher education. Unlike other such schemes, any student who gets admitted to any top higher-education institution will be able to apply under the PM-Vidyalaxmi scheme.

The scheme intends to offer collateral-free education loans and guarantor-free education loans to eligible students from banks and financial institutions to cover the entire sum of tuition fees and other expenses related to the courses. The scheme offers education loans for admission into India’s top HEIs based on the NIRF ranks, with a balanced mix of government and private institutions, across fields of study. 

In phase 1 of the scheme, a total of 860 qualifying institutions will be covered under the scheme, benefiting about 2.2 million eligible students. The government has set aside a budget of INR 3,600 Crore to be utilized for providing education loans to students in the period from 2024-25 till 2030-31 as a part of the PM-Vidyalaxmi scheme. This figure indicates the scheme will benefit about 7 million students during the set tenure. 

Benefits under PM-Vidyalaxmi and eligibility criteria

1. The students can avail of a loan of up to 7.5 lakhs under the scheme, with 75% offered as a credit guarantee on outstanding default. 

2. Students with an annual family income of up to 8 lakhs, and who are not eligible for any other government education loan scheme will be eligible to receive a 3 percent interest subsidiary on loans up to INR 10 lakhs during the moratorium period. 

3. Every year about 1 lakh students will benefit from the scheme, with a priority being set towards students from government institutions pursuing technical or professional courses. 

How to access and apply for an education loan under the scheme

Firstly, to make the application process hassle-free for the students the Department of Education will launch a unified portal for PM-Vidyalaxmi. The application process will be accessible to all banks to ensure the students get the best loan offers possible. Additionally, the interest subsidy will be disbursed via e-vouchers and CBDC wallets. 

Steps for Application

Step 1: The student needs to sign up and sign in on the PM Vidyalaxmi Portal.

Step 2: There they will find a Common Education Loan Application Form (CELAF) to be filled with all the necessary information correctly.

Step 3: The next step is to search for the desired education loan as per one’s needs and eligibility.

Or vice versa, i.e., find the desired education loan and then fill out the CELAF for it. 

In the end, the PM-Vidyalaxmi scheme is another considerate effort by the government to ensure no student gets left behind in fulfilling their higher education dreams, merely because of a shortage of funds. Such schemes and initiatives are always most welcomed and appreciated by the beneficiaries.