PM Vidyalaxmi: A Central Sector Scheme in India

• The Union Cabinet approved PM Vidyalaxmi, a new scheme to provide financial support to meritorious students applying for higher education.

• The scheme covers students who have gained admission in 860 quality higher education institutions, as defined by the National Institutional Ranking Framework (NIRF).

• The scheme could potentially cover 22 lakh students.

• For students with an annual family income of up to ₹8 lakh, and not eligible for benefits under any other government scholarship, a 3% interest subvention for loans up to ₹10 lakh will be provided during the moratorium period.

• The scheme differs from previous central government schemes in the number of institutions eligible, mode of processing of loans, the income cap, and the amount to be disbursed.

• The scheme expands coverage to middle-income families, irrespective of other factors such as caste.

• Under Vidyalaxmi, only institutions with NIRF ranks are eligible.

• The scheme reduces the number of eligible institutions, making it difficult for students who do not have excellent marks to avail the loan. Banks may charge higher rates of interest for other institutions or reject them if they don’t have a good rank.