Cabinet approves PM Vidyalaxmi scheme for higher education loans
Why focus: GS2 Social Justice — Flagship scheme. Numeric traps on ₹7.5L limit, 75% credit guarantee, and 860 HEI eligibility criteria.
In News
What Happened
Why It Matters
Background
History & Context
What Changed
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Income Caps: BEFORE, full interest subventions were largely limited to families earning up to Rs 4.5 lakh under the CSIS. NOW, PM Vidyalaxmi provides a 3 percent interest subvention for families earning up to Rs 8 lakh on loans up to Rs 10 lakh.
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Credit Guarantees: BEFORE, students often faced difficulties securing education loans as banks required guarantors for loans over Rs 4 lakh and collateral above Rs 7.5 lakh. NOW, the government provides a 75 percent credit guarantee for loans up to Rs 7.5 lakh, making them strictly collateral-free and guarantor-free.
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Institutional Coverage: BEFORE, eligible institutions for previous interest subsidy schemes were primarily based on NAAC and NBA accreditation. NOW, eligibility is tied directly to the National Institutional Ranking Framework (NIRF), covering top 100 overall/category institutions, top 200 state institutions, and all central government-governed institutions.
Prelims Angle
NCERT Connection
Practice Questions
Q1
With Reference ToWith reference to the PM Vidyalaxmi scheme, consider the following statements: 1. It provides a 75 percent credit guarantee to banks for education loans up to Rs 10 lakh. 2. A 3 percent interest subvention is provided during the moratorium period for students with an annual family income of up to Rs 8 lakh. Which of the statements given above is/are correct?