Money should not stop a bright student from studying at a good college. The PM Vidyalaxmi scheme, approved by the Union Cabinet in November 2024, aims to make education loans easier. Here is a simple guide.
What the scheme offers
PM Vidyalaxmi helps students admitted to quality higher education institutions get loans from banks and financial institutions without collateral or a guarantor, to cover tuition fees and other course related costs.
Which institutions
The scheme covers Quality Higher Education Institutions (QHEIs), decided based on the National Institutional Ranking Framework (NIRF). At launch, the government said it covered the top ranked government and private institutions, about 860 in number, including those in the top 100 of NIRF overall, category or domain rankings, and state government institutions ranked from 101 to 200. The list is updated every year.
Credit guarantee
For loans of up to Rs 7.5 lakh, the government provides a 75 percent credit guarantee on outstanding defaults. This encourages banks to lend without collateral.
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Interest subvention
- Students with annual family income of up to Rs 8 lakh, who are not eligible for benefits under other government scholarship or interest subvention schemes, can get 3 percent interest subvention on loans of up to Rs 10 lakh during the moratorium period.
- Preference is given to students from government institutions and those in technical or professional courses.
- Students with family income up to Rs 4.5 lakh continue to get full interest subvention under the existing central scheme for eligible courses.
How to apply
- Visit the PM Vidyalaxmi portal, pmvidyalaxmi.co.in.
- Register and fill the Common Education Loan Application Form.
- Choose banks and apply to up to three banks.
- Upload admission proof, fee structure, identity and income documents.
- Track the application status on the portal.
Applications for interest subvention are also made through the same portal, and payments are made through e-vouchers and central bank digital currency wallets, according to the government.
Tips
- Compare interest rates and repayment terms across banks.
- Understand the moratorium period, usually the course period plus up to one year.
- Keep copies of all documents and the loan agreement.
- Start repaying interest early if possible to reduce the total burden.
Bottom line
PM Vidyalaxmi makes it easier for students at top ranked institutions to borrow for their studies without collateral, with extra help for families with lower incomes.
Source / स्रोत: PM Vidyalaxmi portal, Ministry of Education, Press Information Bureau
