The Union Cabinet, chaired by the Prime Minister has approved the PM Vidyalaxmi scheme. An allocation of ₹3,600 crore has been made for the scheme for the period between 2024-25 to 2030-31.
PM-Vidyalaxmi: Objectives
The PM Vidyalaxmi scheme intends to enhance the scope and reach of the range of initiatives undertaken by the Government of India over the past decade in the domains of education and financial inclusion, for maximizing access to quality higher education for the youth of India. This is going to supplement the Central Sector Interest Subsidy (CSIS) and Credit Guarantee Fund Scheme for Education Loans (CGFSEL), the two component schemes of Pradhan Mantri Uchchatar Shiksha Protsahan (PM-USP), being implemented by the Department of Higher Education. Thus, PM Vidyalaxmi and PM-USP will reinforce each other and provide holistic support to all deserving students to pursue higher education in quality HEIs and technical/ professional education in approved HEIs.
PM-Vidyalaxmi: Eligibility Criteria
Any Indian student who gets admission into a top-ranked Quality Higher Education Institutions (QHEIs) will be eligible to seek loans under the PM Vidyalaxmi scheme from banks and financial institutions to cover tuition fees and other expenses related to their higher studies.
PM-Vidyalaxmi: Key Details
- Under PM Vidyalaxmi, students who secure admission in the top 860 quality higher educational institutions can avail of education loans on concessional terms. According to a government estimate, the scheme is going to benefit over 22 lakh students every year.
- A special loan product will offer collateral-free, guarantor-free education loans, accessible through a simple, transparent, student-friendly, and entirely digital application process.
- Loans up to ₹7.5 lakh will be supported by a 75% credit guarantee from the Government of India, assisting banks in expanding coverage. The credit guarantee is meant to support banks in making education loans available to students.
- Additionally, students with an annual family income of up to ₹8 lakh will receive a 3% interest subvention on loans up to ₹10 lakh, while those with annual family incomes of up to ₹4.5 lakhs will continue to receive full interest subvention.
- The interest subvention support will be provided to one lakh students every year.
- Students who are enrolled in government institutions and have opted for technical/ professional courses will receive preference.
- An allocation of ₹3,600 crore has been made for the scheme for the period from 2024-25 to 2030-31, with an estimated 7 lakh fresh students expected to benefit from the interest subvention provided.
- Under PM Vidyalaxmi, students who secure admission in the top 860 quality higher educational institutions can avail of education loans on concessional terms, including interest subvention. The scheme will benefit over 22 lakh students every year, according to government estimates.
(Note: The government will extend the interest subvention to one lakh students every year. Students, who are from government institutions and have opted for technical or professional courses, will get a preference over others, according to the official communique.
PM-Vidyalaxmi: Scheme Implementation
The implementation of the PM Vidyalaxmi scheme will take place through a transparent, digital, and user-friendly system for students. Let us consider the following details:
- The PM Vidyalaxmi scheme will be implemented through a government portal, through which students who get admission in quality institutes will be eligible to get collateral free, guarantor free loans from banks and financial institutions.
- The Department of Higher Education will host a unified portal where students can apply for the education loan as well as interest subvention.
- Subvention payment will be made through E-voucher and Central Bank Digital Currency (CBDC) wallets.
PM-Vidyalaxmi: Interest Subvention
Interest subvention is nothing but a government intervention for extending financial assistance that pays a portion of the interest on loans. In simple words, it is the reduction of interest rate while granting a loan to a borrower. It is the part of loan interest that the government will take on in a bid to ease the burden on students and their parents. In the case of PM-Vidyalaxmi, interest subvention payouts will be made through e-voucher and Central Bank Digital Currency (CBDC) wallets. The subvention will be extended until the end of the moratorium period, which refers to the timeframe when the repayment is to begin.
Let us consider an example, in the case of an education loan offered by the SBI, the moratorium period ranges from six months to a year. So, the repayment will start one year after the completion of the course, or six months after having secured a job, whichever is earlier.
| Banks in India | Interest Rates (%) | Applicable EMI per ₹1 lakh of Education Loan (Approx.) |
| State Bank of India | 8.1 | ₹15,531 |
| Punjab National Bank | 8.1 | ₹15,531 |
| Union Bank of India | 8.1 | ₹15,531 |
| Bank of Baroda | 8.15 | ₹15,555 |
| Bank of India | 8.35 | ₹15,562 |
| Canara Bank | 8.6 | ₹15,774 |
| Indian Bank | 8.8 | ₹15,871 |
| HDFC Bank | 9.5 | ₹16,216 |
| ICICI Bank | 10.25 | ₹16,589 |
| Axis Bank | 13.7 | ₹18,365 |
(Note: The data is based on research and reference of the concerned banking institution for ₹10 lakh loan repayable within a tenure of 7 year. )
PM-Vidyalaxmi: FAQs
What is the PM-Vidyalaxmi scheme?
The PM Vidyalaxmi scheme provides collateral-free, guarantor-free education loans to students admitted to quality Higher Education Institutions (QHEIs), covering the full tuition fees and other course-related expenses.
Which institutions are included under the PM Vidyalaxmi scheme?
The scheme is applicable to Higher Education Institutions ranked in the top 100 by NIRF, including both government and private institutions. It also includes state government HEIs ranked 101-200 and all central government governed institutions. The list of eligible institutions is updated annually based on NIRF rankings.
What kind of financial support is offered for availing education loans under the PM-Vidyalaxmi scheme?
Education loan up to ₹7.5 lakh is supported by a 75% credit guarantee from the Government of India, which helps banks provide education loans to students under the scheme.
What are the additional benefits available for students with lower family income?
Students with an annual family income of up to ₹8 lakh (and not eligible for other government scholarships or interest subventions) can receive a 3% interest subvention on loans up to ₹10 lakh during the moratorium period. Preference is given to those from government institutions pursuing technical or professional courses.
What are the current education loan interest rates?
Interest rates for education loans up to ₹10 lakh start at 8.1% for banks like SBI, PNB, and Union Bank of India, with a seven-year repayment tenure. Private banks such as ICICI (10.25%) and Axis Bank (13.7%) charge higher rates.
How can students apply for loans under the PM-Vidyalaxmi?
Students can apply for loans and interest subvention through the PM-Vidyalaxmi portal, which will be managed by the Department of Higher Education, enabling access to all participating banks.
What is the National Institutional Ranking Framework (NIRF)?
The NIRF is nothing but a methodology for ranking institutions on the basis of a set of parameters. The Ministry of Education (MoE) earlier known as MHRD developed the NIRF to promote healthy competition and transparency among institutions.
Is the 75% credit guarantee applicable to loans up to ₹10 lakh?
No, the 75% credit guarantee is only available for loans up to ₹7.5 lakh. For loans up to ₹10 lakh, students receive a 3% interest subvention instead.
we have karnataka bank ltd account holder we also receive pm vidyalaxmi loan pl reply