Govt launches PM Vidyalaxmi scheme for students pursuing higher education – How to apply, eligibility and benefits

In a move to ensure students can pursue higher education without having to worry about money, the central government has launched a new scheme to financially support meritorious students. PM Vidyalaxmi was approved by the Union Cabinet this week.

Under this scheme, any student who gets admission in quality Higher Education Institution will be eligible to get collateral free, guarantor free loan from banks and financial institutions to cover full amount of tuition fees and other expenses related to the course. The scheme will be administered through a simple, transparent and student-friendly digital system.

The National Education Policy, 2020 recommends that meritorious students in both public and private institutes of higher education should be provided with financial support. So, the newly launched scheme is aligned with NEP 2020.

Higher Educational Institutes that are eligible

As of now 860 top-quality higher educational institutions from across India, covering more than 22 lakh students are eligible to avail benefits of PM Vidyalaxmi scheme providing potential access to benefits for interested students.

Students pursuing courses in top quality higher educational institutions across India, as determined by the National Institutional Ranking Framework (NIRF) rankings – including government and private institutions are eligible to avail benefits of the scheme. The institutes that are ranked within the top 100 in NIRF in overall, category-specific and domain specific rankings; state government institutes ranked in 101-200 in NIRF and all central government governed institutions are eligible.

The central government will update the list of eligible institutes every year using the latest NIRF ranking.

Who can apply and benefits

Students having an annual family income of up to Rs 8 lakhs, and who are not eligible for benefits under any other government scholarship or interest subvention schemes, 3 percent interest subvention for loan up to Rs 10 lakhs will also be provided during moratorium period. The interest subvention support will be given to one lakh students every year.

For a loan amount of up to Rs 7.5 lakhs, a student will be eligible for a credit guarantee of 75% of outstanding default. This will give support to banks in making education loans available to students under the scheme.

While all needy students are eligible, those who are from government institutions and have opted for technical or professional courses will be given preference.

An outlay of Rs 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.

How to apply

Students can apply on the ‘Vidya Lakshmi’ portal under the Department of Higher Education. Through this portal, students can apply for the education loan as well as interest subvention, through a simplified application process to be used by all banks. Payment of interest subvention will be made through E-voucher and Central Bank Digital Currency (CBDC) wallets.

Step 1: The applicant will have to register and login to the Vidya Lakshmi portal

Step 2: Fill-up the Common Education Loan Application Form (CELAF) by providing all the necessary details

Step 3: After filling the form, the applicant can search for Educational Loan and apply as per his/her needs, eligibility and convenience

Alternatively, the applicant can also search for Educational Loan after login and apply for the suitable Educational Loan by filling the CELAF.