PM-VIDYALAXMI SCHEME

TAG: GS-3: ECONOMIC & GS-2: SOCIAL ISSUES

CONTEXT: The Union Cabinet recently approved the PM-Vidyalakshmi Scheme for affordable education loans.

EXPLANATION:

About PM-Vidyalaxmi Scheme:

• The PM-Vidyalaxmi scheme, recently approved by the Union Cabinet, aims to facilitate collateral-free and guarantor-free education loans for students admitted to Quality Higher Education Institutions (QHEIs).
• PM-Vidyalakshmi scheme is a new initiative. With a budget of Rs 3,600 crore for 2024-2031, the scheme is estimated to benefit 7 lakh students.
• The scheme assists 22 lakh students annually overall. It will provide education loans for those enrolling in the top 860 prestigious higher education institutions across India. The funding allocated will span from 2024-25 to 2030-31.
• The scheme is rooted in the National Education Policy 2020.

Eligibility Criteria

• Students from families with an annual income of up to Rs 8 lakh can benefit from the scheme. They will receive a 3% interest subvention on education loans up to Rs 10 lakh. Importantly, there is no need for collateral or a guarantor.
• Priority will be given to students from government institutions pursuing technical and professional courses.
• The application process will be entirely digital. Students can apply through a consolidated portal named PM-Vidyalaxmi. This portal will facilitate access to education loans and interest subvention from various public and private scheduled banks.

Expected Impact:

• This scheme will provide assistance to a total of 22 lakh students every year. It will provide education loans for those enrolling in the top 860 prestigious higher education institutions across India. The funding allocated will span from 2024-25 to 2030-31.

Expanding Access Beyond Existing Schemes:

• The PM-Vidyalaxmi scheme complements the Central Sector Interest Subsidy (CSIS), which offers total interest subvention on loans up to ₹10 lakh for students with family incomes below ₹4.5 lakh.
• Unlike CSIS, the new scheme extends to a broader category of students and includes non-technical and non-professional courses.
• Eligible institutions, determined by NIRF rankings, include the top 100 institutions, select state government institutions, and all central institutions, encompassing 860 institutions.

Source:

https://timesofindia.indiatimes.com/business/india-business/what-is-pm-vidyalaxmi-pm-modi-led-cabinet-approves-new-scheme-for-collateral-free-loans-up-to-rs-10-lakh-for-higher-education-check-details/articleshow/115014741.cms