Cabinet Approves PM-Vidyalaxmi Scheme for Financial Support to Students

1. On 06 November 2024, The Union Cabinet, led by Prime Minister Narendra Modi, approved the PM-Vidyalaxmi Scheme.
2. This is a new initiative to help deserving students by offering them financial support so that they can pursue higher education without worrying about money.
3. The scheme, which will start in 2024-25, is expected to help over 22 lakh students every year, by offering loans without the need for collateral or a guarantor to students joining the best higher education institutions in India.

Key Features of PM-Vidyalaxmi Scheme

1. Who Can Apply: Students who get admission to the top 860 higher educational institutions (QHEIs) in India, based on rankings by the National Institutional Ranking Framework (NIRF), are eligible for this scheme.
   • This includes both government and private institutions ranked in the top 100 in the NIRF list.
2. Loan Details: The scheme offers loans without collateral (no need to pledge assets) and no guarantor (no need for someone to back the loan).
   • The loan can cover full tuition fees and other course-related expenses.
   • Loans of up to ₹ 7.5 lakh will be backed by a 75% guarantee by the Government of India, making it easier for banks to offer these loans.
3. Interest Benefits: Students from families earning up to ₹ 8 lakh annually, who are not getting benefits from any other government scholarship programs, will get a 3% reduction in interest for loans up to ₹ 10 lakh during the repayment break period (the time before loan repayment starts).
   • This support will be available to around 1 lakh students per year.
4. Funding: The government has set aside ₹ 3,600 crore for this scheme from 2024-25 to 2030-31, helping 7 lakh new students benefit from the interest support during this time.
5. How to Apply: The scheme will be completely online. Students can apply for both loans and interest benefits through the “PM-Vidyalaxmi” website.
   • The application process is simple and transparent.
   • Payments for interest benefits will be made using E-vouchers or digital wallets.

Building on Earlier Programs

The PM-Vidyalaxmi Scheme is an addition to other government programs that aim to help students get access to education. It will work alongside two existing programs:

1. Central Sector Interest Subsidy (CSIS) – which provides full interest support for loans up to ₹ 10 lakh for students whose families earn up to ₹ 4.5 lakh per year and are studying technical or professional courses.
2. Credit Guarantee Fund Scheme for Education Loans (CGFSEL) – which helps banks offer loans by giving them a guarantee.

Together, these programs aim to ensure that all deserving students can get a chance to study at the best universities.

Prime Minister's Statement

1. Prime Minister Narendra Modi welcomed the scheme, saying it is an important step to make higher education more affordable for all students in India.
2. He said that the scheme reflects the goals of the National Education Policy (NEP) 2020, which aims to provide financial help to talented students in both public and private institutions.

Conclusion

The PM-Vidyalaxmi Scheme is a big step to help students who deserve a good education but might struggle with financial costs. By offering loans without collateral and help with interest, the scheme will support students in pursuing their dreams of higher education. This initiative is part of a larger effort to improve education and financial support for young people across India.

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