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PM Vidyalaxmi Scheme, approved by the Union Cabinet on 6 November 2024, provides collateral-free, guarantor-free education loans to meritorious students admitted to 1,425 designated Quality Higher Education Institutions (QHEIs), selected by NIRF ranking
3% interest subvention on loans up to ₹10 lakh for families earning up to ₹8 lakh/year, plus a 75% Government credit guarantee on loans up to ₹7.5 lakh; budget of ₹3,600 crore for 2024-25 to 2030-31, targeting 7 lakh students
In FY 2025-26, 1,10,667 of 6,45,514 total loan applications on the portal were for PM-Vidyalaxmi; 70,852 loans sanctioned and 67,728 disbursed; subvention now paid via a Digital Rupee (CBDC) wallet — 35,777 active wallets, ₹57.66 crore disbursed as of 22 July 2026
Make collateral-free, guarantor-free education loans accessible to meritorious students admitted to top-ranked institutions, regardless of family income
Key: 3% interest subvention (income ≤₹8 lakh) on loans up to ₹10 lakh, plus 75% Government credit guarantee on loans up to ₹7.5 lakh; capped at 1 lakh fresh subvention slots/year
Support economically weaker students pursuing technical/professional courses with full interest relief during the loan moratorium
Key: 100% interest subvention (no slot cap) for NAAC/NBA-accredited technical/professional courses, family income ≤₹4.5 lakh; launched April 2009 under the then Ministry of Human Resource Development
Single-window digital platform for students to apply to multiple banks for education loans and track applications
Key: Launched 15 August 2015 by the Department of Financial Services with the Department of Higher Education, IBA and NSDL e-Governance Infrastructure Ltd; now also administers CSIS and PM-Vidyalaxmi disbursement
Ranks HEIs annually; PM-Vidyalaxmi's QHEI list is drawn from the latest NIRF ranking
Administers common loan applications, bank selection and subvention claims for both CSIS and PM-Vidyalaxmi
| Aspect | PM-USP CSIS | PM-Vidyalaxmi |
|---|---|---|
| Eligible institutions | NAAC/NBA-accredited technical/professional institutes, INIs | Top 100 NIRF private, top 200 NIRF state govt, all remaining central govt HEIs (1,425 total) |
| Eligible courses | Professional/technical courses only | All degree/diploma courses |
| Family income limit | ₹4.5 lakh | ₹8 lakh |
| Interest subvention | Full subvention during moratorium | 3% subvention during moratorium |
| Annual slots | No limit | 1 lakh fresh slots/year |
| Repayment period | Up to 15 years after moratorium | Up to 15 years after moratorium |
The moratorium is the course duration plus one year, during which the borrower need not repay the principal. Under both CSIS and PM-Vidyalaxmi, the Government pays part or all of the interest accruing during this window, so the loan does not balloon before the student starts earning.
Simple Analogy: Like an EMI holiday during your studies — the government quietly pays the interest meter for you until a year after you graduate.
PM-Vidyalaxmi implements NEP 2020's recommendation that finance should never block a meritorious student from a top institution
Scheme is framed by the Government as advancing India's SDG 4 target of inclusive, equitable quality education by 2030
PM-Vidyalaxmi is among the first welfare schemes to route subsidy disbursement through a CBDC wallet rather than direct bank transfer
GS Paper 2 > Governance > Government Policies & Interventions for Education
Banking Awareness > Government Schemes & Digital Payments (CBDC)
Which of the following is/are included in the capital budget of the Government of India? 1. Expenditure on acquisition of assets like roads, buildings, machinery, etc. 2. Loans received from foreign governments 3. Loans and advances granted to the States and Union Territories Select the correct answer using the code given below.
Answer: 1, 2 and 3
New Cabinet-approved scheme (Nov 2024); high current-affairs relevance through 2026-27
Quality Higher Education Institution — an institution shortlisted for PM-Vidyalaxmi coverage based on its NIRF rank
Externally Benchmarked Lending Rate — the reference rate (e.g., repo-linked) banks use to price loans, to which PM-Vidyalaxmi caps a +0.5% margin
Central Bank Digital Currency (Digital Rupee) wallet used here to credit interest-subvention amounts to beneficiaries