PM-Vidyalaxmi scheme: Cabinet approves education loan for meritorious students, assistance up to Rs 7.5 lakh offered

The PM-Vidyalaxmi scheme has been approved by the Union Cabinet under which financial assistance will be offered to deserving students so that financial constraints do not deter any young individual from pursuing quality higher education.

According to the government notification, education loans will be provided through a mission-oriented approach to qualified students entering the country’s top 860 prestigious higher education institutions, benefiting over 22 lakh students every year.

A unique loan product will be introduced to provide education loans without collateral and guarantee, with a user-friendly digital application process that is simple and transparent. The Government of India will provide a 75% credit guarantee for loan amounts up to Rs 7.5 lakh, helping banks expand their coverage and support for students.

The scheme offers an interest subvention of 3% on loans up to Rs. 10 lakh for students with an annual family income of up to Rs. 8 lakhs. This is in addition to the existing full interest subsidy available to students with an annual family income up to Rs. 4.5 lakhs. The PM Vidyalaxmi initiative aims to increase the accessibility of quality higher education to the youth by expanding on the efforts made over the past decade.

“A dedicated loan product will enable education loans without collateral and guarantees; made accessible through a simple, transparent, student-friendly and fully digital application process. Loan amounts up to Rs 7.5 lakh will receive a 75% credit guarantee from the Government of India, to help banks support in expanding coverage. Additionally, for students with an annual family income of up to Rs 8 lakh, the scheme will also provide an interest subsidy of 3% on loans up to Rs 10 lakh. This is in addition to the full interest subsidy already being provided offered to students with an annual family income of up to Rs.