PM-Vidya Laxmi Scheme

08.11.2024.

PM-Vidya Laxmi Scheme

Why in the news?           

            Recently, the Union Cabinet approved the PM Vidyalaxmi scheme, which seeks to provide financial support to meritorious students in their pursuit of higher education.

About PM-Vidyalaxmi Scheme:

• It is a Central Sector Scheme.
• The Department of Higher Education will have a unified portal “PM-Vidyalaxmi” on which students will be able to 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-vouchers and Central Bank Digital Currency (CBDC) wallets.

Features of the scheme:

• Under this scheme any student who gets admission to a quality Higher Education Institution (QHEI) will be eligible to get collateral-free, guarantor-free loans from banks and financial institutions to cover the full amount of tuition fees and other expenses related to the course.
• The scheme will be administered through a simple, transparent and student-friendly system that will be inter-operable and entirely digital.
• It will apply to the top quality higher educational institutions of the nation, as determined by the NIRF rankings - including all HEIs, government and private, that are ranked within the top 100 in NIRF in overall, category-specific and domain-specific rankings; state government HEIs ranked in 101-200 in NIRF and all central government governed institutions.
• This list will be updated every year using the latest NIRF ranking, and to begin with 860 qualifying QHEIs.

Loan provision:

○For loan amounts up to ₹ 7.5 lakhs, the student will also 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.

○In addition to the above, for students having an annual family income of up to ₹ 8 lakhs, and not eligible for benefits under any other government scholarship or interest subvention schemes, 3 percent interest subvention for loans up to ₹ 10 lakhs will also be provided during the moratorium period.

○The interest subvention support will be given to one lakh students every year. Preference will be given to students who are from government institutions and have opted for technical/professional courses.

○An outlay of ₹ 3,600 Crore has been made during 2024-25 to 2030-31.

Objectives of the Scheme:

• The PM Vidyalaxmi Scheme seeks to:

○Ensure Financial Inclusion in Education: Enable meritorious students to pursue higher education without financial hurdles.

○Support Top Educational Institutions: Applicable only to top-quality HEIs as per the National Institutional Ranking Framework (NIRF).

○Provide Transparent and Digital Access: Use a fully digital, transparent, and student-friendly platform for loan processing and management.

                                                                 Source: PIB

With reference to PM Vidyalaxmi Scheme, consider the following statements:

1. It is a Centrally Sponsored Scheme.

2. It is applicable to educational institutions which are determined by the National Institutional Ranking Framework rankings.

3. Under this scheme any student who gets admission in quality Higher Education Institution (QHEIs) will get collateral free loan.

How many of the above statements are correct?

A.Only One

B.Only Two

C.All three

D.None

Answer B