On Wednesday, the Union Cabinet approved the PM-Vidyalakshmi scheme aimed at providing financial assistance to meritorious students, ensuring that financial constraints do not hinder their access to quality higher education. Union Minister Ashwini Vaishnaw announced that under the scheme, students admitted to Quality Higher Education Institutions (QHEIs) will be eligible for collateral-free, guarantor-free loans from banks and financial institutions, covering full tuition fees and other course-related expenses.

An allocation of ₹3,600 crore has been approved for the scheme, which will provide education loans to students gaining admission in the top 860 Quality Higher Education Institutions (QHEIs) of the country, as per the National Institutional Ranking Framework (NIRF). The scheme is expected to benefit over 22 lakh students annually. "The Cabinet has approved the PM-Vidyalaxmi scheme to provide financial support to meritorious students so that financial constraints do not prevent any youth of India from pursuing quality higher education," Vaishnaw said at a press conference here.

The scheme will apply to the top Quality Higher Education Institutions (QHEIs) as identified by the NIRF rankings. This includes all government and private higher education institutions ranked within the top 100 in overall, category-specific, and domain-specific rankings, as well as state government institutions ranked between 101 and 200, and all central government-run institutions.

"This list will be updated every year using the latest NIRF ranking, and to begin with 860 qualifying QHEIs, covering more than 22 lakh students to be able to potentially avail benefits of PM-Vidyalaxmi, if they so desire," an official statement said. For loan amounts up to ₹7.5 lakhs, the student will also be eligible for a credit guarantee of 75 pc of outstanding default.

"This will give support to banks in making education loans available to students under the scheme. In addition, for students having an annual family income of up to ₹8 lakhs, and not eligible for benefits under any other government scholarship or interest subvention schemes, 3 percent interest subvention for loans up to ₹10 lakhs will also be provided during the moratorium period.

"The interest subvention support will be given to one lakh students every year. Preference will be given to students who are from government institutions and have opted for technical and professional courses. An outlay of ₹3,600 crore has been made during 2024-25 to 2030-31, and 7 lakh fresh students are expected to get the benefit of this interest subvention during the period," the statement said.

The Department of Higher Education will launch a unified portal, 'PM-Vidyalaxmi,' where students can apply for education loans and interest subvention through a streamlined application process accessible to all banks. Interest subvention payments will be made via e-vouchers and Central Bank Digital Currency (CBDC) wallets.

Union Education Minister Dharmendra Pradhan stated that the scheme will empower millions of students from economically disadvantaged and middle-class backgrounds. "Universalising access to 21st century higher education for India’s talented youth is PM Modi's guarantee. PM's approval to #PMVidyalaxmi with an outlay of ₹3,600 crore will remove obstacles to higher education and enable our yuva shakti to pursue their dreams.

"Collateral-free and guarantor-free education loans under PM Vidyalaxmi will maximise access to higher education for meritorious students and ensure that financial constraints do not prevent students from pursuing education," he said in a post on X.