PM-Vidyalaxmi Scheme

Why in news?

Recently, the union cabinet approved PM Vidyalaxmi scheme, which seeks to provide financial support to meritorious students in their pursuit of higher education

About PM-Vidyalaxmi Scheme:

• It is aCentral Sector Scheme.
• Features
• Under this scheme any student who gets admission in quality Higher Education Institution (QHEIs) will be eligible toget collateral free, guarantor free loan from banksand financial institutions to cover full amount of tuition fees and other expenses related to the course
• The scheme will be administered through a simple, transparent and student-friendly system that will beinter-operable and entirely digital.
• It will be applicable to the top quality higher educational institutions of the nation, asdetermined by the NIRF rankings -including all HEIs,government and private, that are ranked within the top 100 in NIRF in overall, category-specific and domain specific rankings; state government HEIs ranked in 101-200 in NIRF and all central government governed institutions.
• This list will be updated every year using the latest NIRF ranking.
• Loan provision
• For loanamount up to ₹ 7.5 lakhs,the student will also be eligible for a credit guarantee of 75% of outstanding default. This will give support to banks in making education loans available to students under the scheme.
• In addition to the above, for students having an annual familyincome of up to ₹ 8 lakhs, and not eligible for benefits under any other government scholarship or interest subvention schemes,3 percent interest subventionfor loan up to ₹ 10 lakhs will also be provided during moratorium period.
• Theinterest subvention supportwill be given toone lakh students every year.Preference will be given to students who are from government institutions and have opted for technical/ professional courses.
• An outlay of ₹ 3,600 Crore has been made during 2024-25 to 2030-31.
• The Department of Higher Education will have a unifiedportal “PM-Vidyalaxmi” on which students will be able to apply for the education loan as well as interest subvention, through a simplified application process to be used by all banks.
• Payment of interest subvention will be made through E-voucher and Central Bank Digital Currency (CBDC) wallets.