PM-Vidyalaxmi scheme gets cabinet approval, to provide collateral, guarantor free education loans up to ₹7.5 lakh : Valley Vision

PM-Vidyalaxmi Scheme: The Union Cabinet has approved the PM-Vidyalaxmi scheme, aiming to provide financial assistance to meritorious students by offering collateral- and guarantor-free education loans of up to ₹7.5 lakh. Announcing the scheme, Union Minister Ashwini Vaishnaw highlighted that it is designed to ensure financial barriers do not prevent talented youth from accessing quality higher education. PM Narendra Modi also took to social media and wrote, “A big boost to making education more accessible.”

Collateral-Free Loans for Students in Quality Institutions
Under this scheme, students securing admission to top 860 Quality Higher Education Institutions (QHEIs), as per the National Institutional Ranking Framework (NIRF), will be eligible for loans covering tuition and other academic expenses. An initial outlay of ₹3,600 crore has been allocated, expected to benefit over 22 lakh students annually. The loan amount, up to ₹7.5 lakh, includes a 75% credit guarantee, helping banks and financial institutions extend loans with minimal risk.
Interest Subvention for Students with Limited Family Income
The scheme also offers added benefits for students from families with an annual income of up to ₹8 lakh who do not qualify for other government scholarship or interest subvention schemes. For these students, a 3% interest subvention on loans up to ₹10 lakh will be provided during the moratorium period, prioritizing students from government institutions pursuing technical or professional courses. This subvention is expected to aid around 7 lakh new students through 2030-31.
Simplified Loan Application Process via PM-Vidyalaxmi Portal
Applications will be processed through a unified “PM-Vidyalaxmi” portal, where students can seamlessly apply for loans and interest subvention. The government plans to disburse the interest support through e-vouchers and Central Bank Digital Currency (CBDC) wallets, making the process more accessible and transparent.