PM Vidyalaxmi Scheme

The PM Vidyalaxmi Scheme is a Central Sector initiative designed to help meritorious students pursue quality higher education without being restricted by financial difficulties. Approved by the Union Cabinet on 6 November 2024, the scheme provides easier access to education loans for students admitted to recognised quality higher education institutions in India. Its central objective is to ensure that deserving students do not lose educational opportunities merely because their families cannot arrange sufficient funds.

What Is the PM Vidyalaxmi Scheme?

Under the PM Vidyalaxmi Scheme, students who secure merit-based admission to eligible Quality Higher Education Institutions can apply for education loans through participating banks and financial institutions.

The loans are available without requiring collateral or a third-party guarantor. However, the loan amount, rate of interest, repayment period and other conditions may depend on the lending bank’s education loan policy. The scheme operates through a unified digital portal to make the application and processing system simpler, more transparent and student-friendly.

Which Institutions Are Covered?

The scheme covers institutions identified on the basis of the National Institutional Ranking Framework, commonly known as NIRF. It generally includes:

• Institutions ranked among the top 100 in the overall, category-specific and domain-specific NIRF rankings;
• State government higher education institutions ranked between 101 and 200; and
• Higher education institutions governed by the Central Government.

The list of eligible institutions is reviewed and updated according to the latest NIRF rankings. At the time of the scheme’s approval, around 860 institutions covering more than 22 lakh students were expected to fall within its scope.

Major Benefits of the PM Vidyalaxmi Scheme

Collateral-Free and Guarantor-Free Loans

Eligible students can obtain education loans without offering property or another valuable asset as security. They are also not required to arrange an external guarantor merely to access the scheme.

Government Credit Guarantee

For education loans of up to ₹7.5 lakh, the Government provides a 75 per cent credit guarantee to the lending institution. This reduces the bank’s risk and is intended to improve the availability of education finance for deserving students.

Interest Subvention

Students whose annual family income is up to ₹8 lakh may receive a 3 per cent interest subvention on education loans of up to ₹10 lakh. This benefit is available during the moratorium period to eligible students who are not already receiving interest subvention or scholarships under another Central or State Government scheme.

Priority for interest assistance is given to students admitted to government institutions and those pursuing technical or professional courses. The benefit is expected to cover one lakh students every year.