NEWS –  The PM Vidyalaxmi scheme, a new Central Sector initiative, was approved by the Union Cabinet under the leadership of Prime Minister Narendra Modi.

HIGHLIGHTS

Objective: The scheme is designed to provide financial support to meritorious students for higher education.

Eligibility Criteria

• Targeted Institutions: Students who secure admission in any of the 860 designated Quality Higher Education Institutions (QHEIs) are eligible. These include both government and private institutions.
• Coverage: Approximately 22 lakh students are expected to benefit from the scheme, according to the Ministry of Education.

Loan Features

• Type of Loan: The scheme provides collateral-free and guarantor-free loans.
• Scope of Coverage: Loans will cover the full amount of tuition fees as well as other related expenses for the course.

Credit Guarantee Mechanism

• Loans up to ₹7.5 Lakh: For loans within this amount, students will receive a 75% credit guarantee.
• Impact on Banks: The guarantee encourages banks to extend education loans without the usual need for collateral or guarantors.

Financial Outlay and Timeframe

• Budget Allocation: An outlay of ₹3,600 crore has been set aside for the scheme.
• Implementation Period: The scheme will span from 2024-25 to 2030-31.
• Beneficiaries: An estimated 7 lakh new students are expected to benefit from the scheme within this timeframe.