Union Minister for Education Dharmendra Pradhan on Wednesday lauded the Union Cabinet's approval of the PM Vidyalaxmi scheme, a significant initiative to provide financial support to meritorious students under the central sector.

The minister said the scheme will help universalise access to 21st-century higher education for India’s talented youth.

“With an outlay of Rs 3,600 crore, the scheme will remove obstacles to higher education and enable the Yuva Shakti of the country to pursue their dreams,” said the minister.

Collateral-free and guarantor-free education loans under PM Vidyalaxmi will maximise access to higher education for meritorious students and ensure that financial constraints do not prevent students from pursuing education, Pradhan added.

Students having annual family income of up to Rs 8 lakh will be eligible to get 3 per cent interest subvention on education loans up to Rs 10 lakh and loans up to Rs 7.5 lakh shall be eligible for 75 per cent credit guarantee.

“Education loans will be facilitated through a transparent, student-friendly and digital application process that will be common to all banks,” the minister noted.

Pradhan further stated that education loans under PM Vidyalaxmi will be facilitated to students securing admissions in the top 860 higher educational institutions based on NIRF. This will cover more than 22 lakh students every year.

The financial assistance to meritorious students is a key recommendation of the National Education Policy (NEP) 2020 and PM Vidyalaxmi is another concrete step towards implementation of NEP.

“PM Vidyalaxmi will empower millions of students from the poor and middle class,” said the minister.

Meanwhile, the Department of Higher Education will have a unified portal ‘PM-Vidyalaxmi’ on which students will be able to apply for the education loan as well as interest subvention, through a simplified application process to be used by all banks.