The Government of India launched the PM-Vidyalaxmi, as a new central sector scheme in November 2024. The main objective of the scheme is to ensure that no student is denied the opportunity to pursue higher education due to financial constraints. Under the scheme, collateral free and guarantor-free education loan is provided to all students who get merit-based admission in top Quality Higher Education Institutions (QHEIs) and who desire to avail the education loan. Further, for students with annual family income up to Rs 8 lakh, the scheme provides 3% interest subvention on loans up to Rs 10 lakh. Each year up to one lakh fresh students not availing any other scholarship or interest subvention on education loan are eligible for this interest subvention benefit. An outlay of Rs 3,600 crore has been made from 2024-25 to 2030-31, for providing 3% interest subvention benefit for up to 7 lakh fresh students during this period.
A dedicated online platform, the PM Vidyalaxmi portal https://pmvidyalaxmi.co.in has been developed, operational since 25th February 2025, on which students can apply for the education loan as well as interest subvention, through a simplified application process to be used by all banks. Since the launch of this scheme on 6th November, 2024 till 21st July, 2026, 1,12,817 collateral-free and guarantor-free PM Vidyalaxmi education loans have been sanctioned. The amount sanctioned is Rs 15,634.78 crore.
Further, the Department of Higher Education is implementing the PM Uchchatar Shiksha Protsahan Credit Guarantee Fund Scheme for Education Loans (PM-USP CGFSEL). Under the CGFSEL, Central Government gives guarantee for the education loans availed by students without any collateral security and third-party guarantee for a maximum loan limit of Rs 7.5 lakh. The Scheme, as a default, provides guarantee cover to the extent of 75% of the loan amount. Since the launch of the scheme in 2015 till 21st July, 2026, 14,65,880 credit guarantees for an amount of Rs 59,843.74 crore have been issued.
To ensure that only eligible students get interest subvention benefit, Aadhaar based de-duplication is carried out. Once the application for interest subvention gets approved, the student gets an SMS message to install the PM-Vidyalaxmi Digital Rupee App on the registered mobile. On receipt of claims from Banks, interest subvention amount is credited to the digital wallet of each student by the Government. Once the student opts for redemption, the interest subvention amount gets credited to his/her education loan account as Direct Benefit Transfer (DBT).
Further, the release of interest subvention under the Scheme from 2nd year onwards is subject to satisfactory academic performance of the student. The QHEIs registered/onboarded on PM Vidyalaxmi portal have provision to upload semester-wise progress reports of students on the portal for performance monitoring.
The Scheme is applicable for all Scheduled Banks/Regional Rural Banks (RRBs)/Cooperative Banks. At present, on the PM Vidyalaxmi Portal, 12 Public Sector Banks, 20 Private Banks, 25 Regional Rural Banks and 7 Cooperative banks have been onboarded to help eligible students, including those from rural, tribal and underprivileged areas to avail the benefits of PM Vidyalaxmi.
Scholarships and education loans together help the meritorious and deserving students to pursue higher education, thereby reducing the dropout rates. As a result, the Gross Enrolment Ratio (GER) in higher education has increased from 23.0 in 2013-14 to 30.0 in 2023-24.
This information was given by the Minister of State for Education, Dr. Sukanta Majumdar, in a written reply in Lok Sabha today.
