New Delhi [India], November 6 : After the Union Cabinet approved the PM Vidyalaxmi scheme, which provides loans to eligible students for higher studies, Union Education Minister Dharmendra Pradhan said on Wednesday that this is a significant step towards achieving the Prime Minister's vision of a 'Viksit Bharat'.
Speaking to ANI, Pradhan highlighted that a key proposal from the education department has received the Prime Minister's approval.
"This is the Pradhan Mantri Vidyalaxmi Yojana, under which loans of up to Rs 10 lakh will be granted to one lakh meritorious students across the country, with certain concessions. There are two or three main features of this scheme. First, students seeking financial assistance to study at any of the 860 NIRF-ranked institutions in the country can apply for this loan. Second, no guarantor will be required. While previous schemes had some hurdles, this scheme addresses those. A total financial grant of Rs 3,600 crore has been allocated. This is a crucial step towards realising the Prime Minister's vision of a 'Viksit Bharat'," said Dharmendra Pradhan.
Under the scheme, any student admitted to a higher education institution who wishes to obtain an education loan can apply through the PM Vidyalaxmi scheme.
"These loans will be collateral-free and guarantor-free," Union Information Minister Ashwini Vaishnaw told reporters following the Cabinet meeting.
The scheme will cover a maximum of one lakh students each year.
Students with an annual family income of up to Rs 8 lakh are eligible for a three per cent interest subsidy on education loans of up to Rs 10 lakh. This is in addition to the full interest subsidy available to students with an annual family income of up to Rs 4.5 lakh.
The government has stated that no deserving student will be denied higher education due to financial constraints.
Each year, the Department of Higher Education will prepare a list of high-quality institutions, including the top 100 ranked institutes in overall, category-specific, or domain-specific rankings in the NIRF, the top 200 state/UT government HEIs in the NIRF, and all remaining HEIs under the Government of India.
Loan applications will be processed, approved, monitored, and disbursed via the PM Vidyalaxmi portal.
Loans of up to Rs 7.5 lakh will be eligible for a credit guarantee covering 75 per cent of any outstanding default.