About

• The Union Cabinet has recently approved PM Vidyalaxmi, a new Central Sector scheme that seeks to provide financial support to meritorious students.
• PM Vidyalaxmi is a key initiative stemming from the National Education Policy (NEP), 2020, which had recommended that financial assistance should be made available to meritorious students in Higher Education Institutions.

About the Scheme

• Under the scheme, any student who gets admission in a quality Higher Education Institution (QHEIs) will be eligible to get collateral free, guarantor free loan from banks and financial institutions to cover full amount of tuition fees and other expenses related to the course. 
• The program targets top-tier educational institutions, identified through the National Institutional Ranking Framework (NIRF) rankings, including both government and private institutions.

• The implementation will occur through a digital, transparent, and student-friendly system.
• The programme is projected to assist more than 2.2 million students.

Financial Assistance

• For loan amount up to ₹ 7.5 lakhs, the student will also be eligible for a credit guarantee of 75% of outstanding default. This will give support to banks in making education loans available to students under the scheme.
• In addition to the above, for students having an annual family income of up to ₹ 8 lakhs, and not eligible for benefits under any other government scholarship or interest subvention schemes, 3 percent interest subvention for loan up to ₹ 10 lakhs will also be provided during moratorium period.