PM Vidyalaxmi Scheme: Eligibility, Interest Rates, Benefits & How to Apply
taazatimeupdate.com
Published on: 16May2025
To make higher education more accessible for deserving students, the Indian government has introduced the Pradhan Mantri Vidyalaxmi (PM Vidyalaxmi) Scheme. This central scheme is designed to offer financial assistance to students who wish to pursue higher education, removing financial hurdles that often come in the way of their academic dreams.
we’ll break down everything you need to know about the PM Vidyalaxmi Scheme, including its purpose, benefits, eligibility criteria, interest rate support, and how to apply.
What is the PM Vidyalaxmi Scheme?
The PM Vidyalaxmi Scheme is a student-friendly loan initiative launched to ensure that financial challenges do not stop talented youth from attaining higher education. The scheme aligns with the goals of the National Education Policy (NEP) 2020, emphasizing financial support for meritorious students through public and government-recognized Higher Education Institutions (HEIs).
PM Vidyalaxmi Scheme details
Scheme | PM Vidyalaxmi Scheme |
Benefits | Collateral-free, guarantor-free loans to meritorious students to cover their tuition fees and other course-related expenses |
Eligible students | Any student who has been admitted to Quality Higher Education Institutions (QHEIs) and Higher Education Institutions (HEIs) |
Institutions Covered | QHEIs, HEIs within the top 100 in the NIRF ranking and state government HEIs ranked 101-200 in the NIRF ranking |
Interest Subvention | 3% interest subvention is provided for a loan up to Rs. 10 lakh during the moratorium period for students having an annual family income of up to Rs. 8 lakh |
Credit Guarantee | A credit guarantee of 75% of the outstanding default amount is given for a loan amount up to Rs. 7.5 lakh |
Application Process | Through the unified portal of PM-Vidyalaxmi |
With a financial allocation of ₹3,600 crore from 2024-25 to 2030-31, this scheme covers all Scheduled Commercial Banks, Cooperative Banks, and Regional Rural Banks (RRBs). Its goal is to eliminate financial roadblocks for students and empower them to pursue higher studies without stress.
This initiative works alongside the Credit Guarantee Fund Scheme for Education Loans (CGFSEL) and the Central Sector Interest Subsidy (CSIS) under the PM-USP umbrella. Under CSIS, students from families earning up to ₹4.5 lakh per year get full interest relief on education loans up to ₹10 lakh during the moratorium period.
Together, PM Vidyalaxmi and PM-USP aim to offer comprehensive financial support for deserving students enrolled in top-ranking Quality Higher Education Institutions (QHEIs).
Key Objectives of the PM Vidyalaxmi Scheme
The main objective of the PM Vidyalaxmi Scheme is to offer collateral-free and guarantor-free loans to eligible students. This initiative ensures that lack of financial backing doesn’t hinder academic aspirations.
Benefits of PM Vidyalaxmi Scheme
Here’s how students benefit from this progressive scheme:
- Students admitted to the top 860 Quality Higher Education Institutions (QHEIs) in India will be eligible for financial aid.
- Around 22 lakh meritorious students will receive support to pursue higher education based on updated NIRF rankings.
- The scheme offers guarantor-free and collateral-free education loans.
- A credit guarantee covering 75% of the outstanding default for loans up to ₹7.5 lakh will be provided, encouraging banks to issue loans confidently.
- Students from families with an annual income of up to ₹8 lakh will receive a 3% interest subvention on education loans up to ₹10 lakh during the moratorium period.
An estimated 7 lakh new students are expected to benefit from the interest subvention each year.
Eligibility Criteria for PM Vidyalaxmi Scheme
To be eligible for this scheme, students must meet the following conditions:
- Admission must be secured in Quality Higher Education Institutions (QHEIs), including both public and private colleges ranked within the top 100 in NIRF rankings (overall or category/domain-specific).
- Students from central government-run institutions and state government HEIs ranked 101-200 in NIRF are also covered.
- Applicants can belong to any income group, but benefits like interest subvention are available only for those with an annual family income up to ₹8 lakh.
- The scheme is intended for students seeking tuition fee coverage and course-related expenses through formal loans.
- Students already receiving scholarships, subsidies, or fee reimbursements from Central/State Governments are not eligible for the PM Vidyalaxmi loan benefits.
- If a student discontinues studies due to academic/disciplinary reasons, they are ineligible for benefits. However, if the withdrawal is due to medical emergencies, supported by valid documentation, the benefits may still apply.
Interest Subvention Under the PM Vidyalaxmi Scheme
Under this scheme, students from families earning up to ₹8 lakh annually will receive a 3% interest subvention on loans up to ₹10 lakh during the moratorium period (course duration plus one year or six months after employment, whichever is earlier).
Key points to note:
- This benefit is available only to one lakh students annually.
- Priority is given to students in technical or professional programs enrolled in government institutions.
- Students already availing of other government interest subsidies are not eligible under this scheme.
How to Apply for PM Vidyalaxmi Scheme?
The application process for the PM Vidyalaxmi Scheme is completely digital, transparent, and easy to follow. A dedicated PM Vidyalaxmi online portal will be launched by the Department of Higher Education.
Application Highlights:
- Students can apply for loans and interest subvention online via a unified portal.
- The platform will be interoperable for all participating banks.
- Disbursements such as interest subsidies will be processed through Central Bank Digital Currency (CBDC) wallets or e-vouchers, ensuring seamless and secure transactions.
Documents Required for PM Vidyalaxmi Scheme
Though the official list will be available on the scheme’s portal, applicants are likely to need the following documents:
- Aadhaar card
- Bank account details
- Proof of admission into an eligible HEI
- Identity verification documents
Students are advised to check the latest requirements on the official PM Vidyalaxmi website once it is live.
Empowering Dreams Through Education
The PM Vidyalaxmi Scheme is a transformative step towards making quality education accessible to all deserving students across India. By offering collateral-free, guarantor-free loans and interest subsidies, it opens doors for youth from economically weaker sections and middle-class families to pursue their academic goals without financial pressure.
This scheme not only promotes financial inclusion but also aligns with the larger vision of building a skilled, educated, and empowered India. If you’re a student planning for higher studies, the PM Vidyalaxmi Scheme could be your gateway to a brighter future.
