PM Vidyalakshmi Scheme 2024: Meaning, Significance, Eligibility and How to Apply

The Union Cabinet, led by Prime Minister Narendra Modi, recently approved the PM Vidyalaxmi Scheme on 6^th November 2024, a new Central Sector initiative focused on making higher education accessible to all deserving students. This program offers collateral-free, guarantor-free loans, providing vital financial support to ensure that capable students are not held back by financial constraints.

The PM Vidyalaxmi Scheme is a significant initiative emerging from the National Education Policy, 2020, which advocated for financial support to be provided to deserving students through various means across both public and private Higher Education Institutions (HEIs). This Scheme also empowers the students to pursue their academic goals by easing the financial burden on their respective families. Through this initiative, the government seeks to close the gap between ambition and financial accessibility, ushering in a new era of educational empowerment.

What is PM Vidyalakshmi Scheme 2024?

The PM Vidyalaxmi Scheme is a student-focused loan initiative that provides financial assistance without requiring collateral or a guarantor. This makes it especially beneficial for students from economically disadvantaged backgrounds and underserved areas. Under this scheme, any student admitted to a quality Higher Education Institution (HEI) can secure a collateral-free, guarantor-free loan from banks or financial institutions to cover the full cost of tuition and other educational expenses. By removing financial barriers, the program empowers ambitious students to pursue higher education, even if they lack the financial support typically needed for quality institutions.

Features of PM Vidyalakshmi Scheme

1. Collateral-Free Loans – Students can now access these loans without needing to provide any security, ensuring that financial limitations don’t hinder educational access.
2. No Guarantor Required – Unlike standard student loans, this scheme eliminates the need for a guarantor. This helps in reducing financial strain on families and streamlining the loan approval process.
3. Flexible Repayment Options – The scheme offers flexible repayment terms, allowing students to start repayments after a moratorium period, typically following the completion of their course, giving them time to establish their careers.
4. Broad Eligibility Range – This scheme supports a wide variety of courses, including undergraduate, postgraduate, and professional programs, expanding opportunities for students with diverse academic aspirations.
5. Interest Rate Subsidies – Students from families with an annual income of up to Rs. 8 lakhs are eligible for a 3% interest subsidy on education loans up to Rs. 10 lakhs.

Which Educational Institutions Qualify for the PM Vidyalakshmi Scheme?

The scheme applies to top-tier higher education institutions across the country, as identified by the NIRF rankings. Eligible institutions include all public & private HEIs that rank within the top 100 in overall, category-specific, or domain-specific NIRF rankings. Additionally, state government HEIs ranked between 101-200 and all centrally governed institutions also qualify.

List of Top Education Institutes has the NIRF Ranking

1. Indian Institutes of Technology (IITs)
   • IIT Bombay
   • IIT Delhi
   • IIT Madras
   • IIT Kanpur
   • IIT Kharagpur
2. Indian Institutes of Management (IIMs)
   • IIM Ahmedabad
   • IIM Bangalore
   • IIM Calcutta
   • IIM Lucknow
   • IIM Kozhikode
3. National Institutes of Technology (NITs)
   • NIT Tiruchirappalli
   • NIT Surathkal
   • NIT Rourkela
4. Central Universities
   • Jawaharlal Nehru University (JNU), New Delhi
   • University of Delhi (DU)
   • Banaras Hindu University (BHU)
5. Other Leading Institutions
   • All India Institute of Medical Sciences (AIIMS), New Delhi
   • Tata Institute of Social Sciences (TISS), Mumbai
   • Indian Statistical Institute (ISI), Kolkata

These institutions are recognized based on their NIRF rankings and meet the eligibility criteria for the PM Vidyalakshmi Scheme.

What is the Loan Amount Offered under the PM Vidyalakshmi Scheme?

The PM Vidyalakshmi Scheme offers financial support to students in the form of loans for pursuing higher education. Students are eligible for loans of up to Rs. 7.5 lakhs without keeping anything for  collateral or a guarantor. To further encourage banks to offer these loans, the scheme includes a provision where 75% of the outstanding default amount is covered by a credit guarantee. This guarantee provides additional security to financial institutions, reducing their risk and facilitating easier access to education loans for students. This support aims to make higher education more accessible by ensuring that students can secure the necessary funding, even in the absence of traditional collateral or guarantors.

Eligibility and Application Process for PM Vidyalakshmi Scheme

Eligibility Criteria for PM Vidyalakhsmi Scheme

• Students admitted to Quality Higher Education Institutions can apply for collateral-free, guarantor-free loans to cover full tuition and other course-related expenses.
• Students from families with an annual income up to Rs. 8 lakhs, who are not benefiting from other government scholarships or interest subsidies, are eligible for a 3% interest subvention on loans up to Rs. 10 lakhs during the moratorium period.
• Under the PM-USP CSIS scheme, students with an annual family income of up to Rs. 4.5 lakhs pursuing technical or professional courses in approved institutions can receive full interest subvention on education loans up to Rs. 10 lakhs. Together, PM Vidyalakshmi and PM-USP CSIS schemes provide comprehensive support for students pursuing higher education and technical courses.

Application Process

• Students can apply for loans and interest subvention through the PM Vidyalakshmi unified portal provided by the Department of Higher Education.
• This portal simplifies the application, allowing students to access education loans and interest subsidies through all participating banks.
• Interest subvention payments will be made via E-vouchers and Central Bank Digital Currency (CBDC) wallets, ensuring easy access and transparency in fund disbursement.

Final Thoughts

The PM Vidyalaxmi Scheme represents an important move toward making education more inclusive in India. Offering loans without the need for collateral or a guarantor, this scheme enables students to aim high and follow their career aspirations without financial stress. Beyond helping students and their families, this initiative also supports the creation of a skilled and educated workforce that can propel India’s economic development.

Sources: msn.com