Pradhan Mantri Vidyalaxmi (PM-Vidyalaxmi)

What is it?

PM-Vidyalaxmi is about making sure that a bright student who gets into a good college does not have to give up the seat because the family has no property to pledge and nobody to stand guarantee for a loan. The Union Cabinet approved it on 6 November 2024.

The first part is the loan itself. If you get admission to one of the 860 Quality Higher Educational Institutions covered by the scheme, banks will give you an education loan without collateral and without a guarantor, covering the full amount of tuition fees and other expenses related to the course. To make banks comfortable lending without security, the Government provides a credit guarantee of 75 percent of the outstanding default on loans up to Rs 7.5 lakh.

The second part is help with the interest. Students whose annual family income is up to Rs 8 lakh get a 3 percent interest subvention on a loan of up to Rs 10 lakh. Separately, students whose family income is up to Rs 4.5 lakh continue to get full interest subvention under the existing PM-USP interest subvention scheme, so the poorest students are not worse off.

The scale is meant to be large. About 22 lakh students a year study at the covered institutions and are therefore eligible in principle. The interest subvention is planned for one lakh students each year, and about seven lakh students over the period 2024-25 to 2030-31, with an outlay of Rs 3,600 crore.

Applications are made through a single unified portal named PM-Vidyalaxmi, which the Government describes as "simple, transparent, student-friendly and entirely digital". A common misunderstanding: this does not cover every college in India. It applies to the notified list of quality institutions, so check that your institution is on that list before counting on it.

Potential benefit

A collateral-free and guarantor-free education loan covering "full amount of tuition fees and other expenses related to the course" at 860 qualifying institutions, backed by a Government credit guarantee of 75 percent of the outstanding default on loans up to Rs 7.5 lakh. On top of that, a 3 percent interest subvention is given to students with annual family income up to Rs 8 lakh, on loans up to Rs 10 lakh. Students with family income up to Rs 4.5 lakh continue to receive full interest subvention under the existing PM-USP scheme. No maximum loan figure is fixed for the loan itself, which is why the amount fields are left blank.

Who can apply?

Other conditions stated by the government

• You must be admitted to one of the 860 Quality Higher Educational Institutions (QHEIs) covered by the scheme.
• For the 3 percent interest subvention, annual family income must be up to Rs 8 lakh, and the subvention applies to a loan of up to Rs 10 lakh.
• Students with family income up to Rs 4.5 lakh get full interest subvention under the existing PM-USP central sector interest subsidy scheme instead.
• The credit guarantee of 75 percent of outstanding default applies to loans up to Rs 7.5 lakh.
• The interest subvention is targeted at about 1 lakh students per year, so it is not automatic for everyone who takes a loan.

Eligibility information is provided for informational purposes only. Final eligibility and approval are determined by the relevant government authority.

How to apply

Apply through the unified PM-Vidyalaxmi portal, which the Government describes as an entirely digital, simple and transparent application process. The application is routed to participating banks, which sanction the collateral-free and guarantor-free loan. Interest subvention, where the published conditions are met, is applied against the loan rather than paid to you directly.

Where to apply: online and bank

Deadline

No fixed deadline. Applications are accepted on a rolling basis.