Source: TH
Context: On November 6, 2024, the Union Cabinet approved PM Vidyalaxmi, a Central Sector Scheme aimed at providing financial support to meritorious students pursuing higher education.
- The scheme offers collateral-free and guarantor-free loans to cover tuition fees and related expenses for students admitted to select quality institutions ranked by the National Institutional Ranking Framework (NIRF).
About PM Vidyalaxmi Scheme:
- Objective: To provide financial assistance to meritorious students, eliminating financial constraints in accessing quality higher education.
- Eligibility: Available to students admitted to top 860 HEIs in India, as per NIRF rankings, covering over 22 lakh students annually.
- Loan features: Offers collateral-free, guarantor-free education loans with a user-friendly, digital application process.
- Credit guarantee: Government provides a 75% credit guarantee on loans up to ₹7.5 lakhs, supporting banks in loan expansion.
- Interest subvention: For families with an annual income up to ₹8 lakhs, a 3% interest subvention is provided on loans up to ₹10 lakhs. Full interest subvention is available to students with family incomes up to ₹4.5 lakhs under the PM-USP scheme.
- Complementary schemes: Supplements existing schemes like CSIS and CGFSEL under PM-USP, offering comprehensive support for technical and professional courses in approved HEIs.
How PM Vidyalaxmi Differs from Other Schemes?
- Broader Income Coverage: Extends benefits to middle-income families with an income cap of ₹8 lakh, unlike earlier schemes focused on low-income groups.
- Interest Subvention: Offers 3% interest subvention during the moratorium period for loans up to ₹10 lakh, benefiting 1 lakh students annually.
- Institution Eligibility: Restricts eligible institutions to top NIRF-ranked colleges and universities, unlike earlier schemes that required NAAC and NBA accreditation.
- Focus on Quality: Targets high-ranking institutions, reducing the number of eligible institutions to around 860, emphasizing quality over quantity.
- Simplified Loan Process: Uses the Vidyalaxmi portal for streamlined loan applications, tracking, and linkage with major public and private banks.
- Outlay and Reach: Allocates ₹3,600 crore for the period 2024-2031, aiming to benefit 22 lakh students.
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