PM Vidyalaxmi Scheme: Promoting Educational Inclusion in India
The Pradhan Mantri Vidyalaxmi Scheme is a flagship initiative of the Education Ministry approved by the Union Cabinet on 6th November 2024, designed to make quality higher education accessible to deserving students facing financial constraints. The scheme provides collateral-free and guarantor-free education loans to students who have secured merit-based admission through competitive exams in designated Quality Higher Educational Institutions (QHEIs) in the country.
Financial Features and Benefits
The scheme offers education loans without any collateral or third-party guarantees, with no upper limit on loan amount—the amount depends on course fees and associated expenses including hostel fees, laptop costs, and living expenses. The government provides a 75% credit guarantee for loans up to ₹7.5 lakh to encourage lending institutions. Interest rates are capped at the bank's Externally Benchmarked Lending Rate (EBLR) + 0.5%, always lower than regular education loans. The repayment period extends up to 15 years excluding a moratorium period of course duration plus one year.
For students with annual family income up to ₹8,00,000, the scheme provides a 3% interest subvention on loans up to ₹10 lakh during the moratorium period. This supplements the existing PM-USP CSIS scheme which provides full interest subvention for students with family income up to ₹4.5 lakh. However, there is an annual limit of one lakh students for the 3% interest subvention benefit under PM-Vidyalaxmi. The government has allocated a budget of ₹3,600 crores from 2024-2025 to 2030-2031 for the scheme, expecting to benefit 7 lakh fresh students during this seven-year period.
Eligibility and Coverage
The scheme currently covers 1,425 Quality Higher Educational Institutions selected based on NIRF rankings, including top 100 ranked HEIs in overall/category-specific rankings, top 200 ranked HEIs under state/UT governance, and all remaining HEIs under central government governance. Management quota, NRI quota admissions, Indian campuses of foreign institutions, and foreign campuses of Indian institutions are excluded. The scheme is available for all degree/diploma programs in India with no limit on the number of students getting loans, provided through Scheduled Banks, Regional Rural Banks, and Cooperative Banks participating in the scheme.
Students must maintain satisfactory academic performance from the second year onwards to continue receiving interest subvention benefits, and cannot discontinue courses midway or be expelled for disciplinary reasons. Benefits can be availed only once for either undergraduate, postgraduate, or integrated courses.
Implementation and Digital Platform
The scheme operates through a dedicated digital portal that enables common loan applications, bank selection, application tracking, interest subvention requests, and digital processing. Eligible students receive interest subvention amounts through the PM Vidyalaxmi Digital Rupee App (CBDC Wallet), which is then transferred to their education loan account. As of July 22, 2026, there are 35,777 active wallets enabling disbursement of subsidies worth ₹57.66 crore.
Performance and Impact Data
In FY 2025-26, the portal received 645,514 education loan applications across all education schemes, with 110,667 applications specifically for PM-Vidyalaxmi loans. Of these, 70,852 loans were sanctioned and 67,728 loans were disbursed. The gender distribution showed 368,742 male applicants and 276,764 female applicants across all schemes, with 203,438 loans sanctioned for men and 158,629 for women.
The scheme has demonstrated inclusive reach across social categories including Economically Weaker Section (EWS), General category, Non-Creamy Layer Other Backward Classes (NCOBC), Other Backward Classes (OBC), Scheduled Castes (SC), Scheduled Tribes (ST), and Persons with Disabilities (PwD). For FY 2025-26, total claims pertaining to 2024-25 received at Canara Bank amounted to 414,844 claims worth ₹892.81 crores, significantly reducing repayment burden for student beneficiaries.
The scheme contributes to India's progress towards SDG 4 (inclusive and equitable quality education) and aligns with the National Education Policy 2020 objectives of ensuring financial constraints do not prevent meritorious students from accessing quality education.