New Delhi: The Union Cabinet on Wednesday announced the approval of PM Vidyalaxmi, a new Central Sector program aimed at providing financial assistance to deserving students, ensuring that financial constraints don’t hinder access to higher education.

Under PM Vidyalaxmi, any student admitted to a Quality Higher Education Institution (QHEI) will be eligible for a collateral- and guarantor-free loan from banks and financial institutions, covering tuition fees and related expenses.

The scheme applies to top-ranked higher education institutions in the nation, as determined by NIRF rankings, covering government and private HEIs within the top 100 overall, category-specific, and domain-specific lists; it also includes state government HEIs ranked from 101 to 200 and all central government institutions.

For loans up to Rs 7.5 lakh, students can receive a 75% credit guarantee on any defaulted amount, facilitating banks’ ability to extend educational loans.

Additionally, students with an annual family income up to Rs 8 lakh, who are not eligible for other government scholarships or interest subvention, will receive a 3% interest subvention for loans up to Rs 10 lakh during the moratorium period.

This support is projected to benefit 1 lakh students annually, prioritizing those from government institutions and those in technical or professional courses.

The government has allocated Rs 3,600 crore from 2024-25 to 2030-31, with an expected reach of 7 lakh new students for interest subvention.

The Department of Higher Education will operate a unified “PM-Vidyalaxmi” portal, allowing students to apply for both education loans and interest subvention through a streamlined process accessible across banks.

Payments for subventions will utilize E-vouchers and Central Bank Digital Currency (CBDC) wallets.

Additionally, PM-USP CSIS offers full interest subvention on education loans up to Rs 10 lakh during the moratorium period for students with family incomes up to Rs 4.5 lakh who are enrolled in technical or professional courses at approved institutions.

Together, PM Vidyalaxmi and PM-USP will provide comprehensive support to eligible students pursuing quality higher education and technical courses in recognized institutions.