Dr. Parveen Kumar
Education today has become unaffordable especially for students coming from resource poor families. As a result their dreams of acquiring higher education get shattered. Unable to fulfill their aspirations and desires, they run the risk of landing in various activities which might be socially unacceptable. When the energy of youths is not channelized in a positive direction, they cannot contribute to the development of their societies and instead become a burden on the society. India now holds the distinction of having the largest percentage of youth in total population of the country. As such, it becomes urgent and mandatory on the part of the government to ensure that no youth of the country is deprived of the opportunities to accomplish their goals merely due to financial constraints. To take care of higher education needs of youths, the government of the country has come up with the ‘Pradhan Mantri Vidyalaxmi’ scheme. The Union Cabinet on November 06, 2024 approved ‘Pradhan Mantri Vidyalaxmi’ (PM-Vidyalaxmi) as a Central Sector Scheme to financial support meritorious students so that financial constraints do not prevent any youth of country from pursuing quality higher education. Initially, the scheme allowed students to avail loan facilities for pursuing graduate and post graduate degrees/diplomas from 860 Quality Higher Educational Institutes (QHEIs) across the country. Now the no. of such QHEIs has increased to 904. Vidyalaxmi, infact has been started as a mission mode mechanism will facilitate and drive the extension of education loans to meritorious students who get admission in the top quality Higher Educational Institutions (QHEIs) of the nation, translating to covering more than 22 lakh students every year.
Students admitted through open competitive examinations/merit based admission shall get this loan. Students admitted through management quota (or similar quota) will not be eligible. Students of all family income groups will be eligible to avail this credit facility. There is no ceiling on the maximum loan amount. It will depend on course fee and other fees charged by the QHEI and other associated expenses which will include expenses incurred on mess, hostel fee, other refundable and non-refundable fees of the QHEI, cost of a reasonable quality laptop and reasonable amount of living expenses required by the student during the entire course period. Bank may take life insurance cover of the student borrower if the loan amount is above certain threshold, to be decided by individual banks. As per request of the borrower, the insurance premium can be included in the education loan amount. The repayment period of the education loan would be up to 15 years excluding moratorium period (Course period + 1 year). Furthermore, for students with up to Rs. 8 lakhs annual family income, the scheme will also provide for 3% interest subvention on loans up to Rs 10 lakh. If education loan amount is more than ? 10 lakhs, interest subvention shall be provided for disbursed total principal amount of loan up to ? 10 lakhs only; 3% Interest subvention shall be provided for interest accrued on outstanding education loan during moratorium period.
This is in addition to the full interest subvention already offered to students with up to Rs. 4.5 lakhs annual family income. PM Vidyalaxmi will build on the scope and reach of initiatives taken over the last decade for maximizing access to quality higher education for the youth. For Banks to expand coverage loan amounts up to ? 7.5 lakhs will be provided a 75% credit guarantee by the Government of India.
Students availing any other Central /State Government Scholarship or any other interest subvention scheme or Fee reimbursement shall not be eligible for availing benefits under this Also interest subvention and credit guarantee under this scheme shall not be available to those students who discontinue their course midstream, or who are expelled from the Institution on disciplinary or academic grounds. However, Interest subvention and credit guarantee would be available only if discontinuation is due to medical grounds for which necessary documentation to the satisfaction of the Head of educational institution needs to be provided.
As far as criteria for eligibility for an institute to be recognized as QHEIs is concerned, it should be in the top 100 ranked HEIs in the overall/category-specific and/or domain specific rankings in latest list of NIRF published by the Ministry of Education; or in the top 200 ranked HEIs under the governance of state/UT governments in the latest list of NIRF published by the Ministry of Education and all remaining HEIs under the governance of Government of India. Indian campus of foreign education institutions, foreign campus of Indian education institutions and foreign education institutions will not be covered under PM Vidyalaxmi. For ensuring equitable inter-state representation, all-India slots will be distributed across States based on population. If enough applications do not come from a State/UT, vacant slots shall be redistributed among remaining states on pro-rata basis. The interest rates charged on the educational loan shall be capped at individual bank’s Externally Benchmarked Lending Rate (EBLR) + 0.5%. In all cases, interest rate charged for loans under PM-Vidyalaxmi shall be less than the interest rate charged by the bank.
After the moratorium period, entire interest on the outstanding loan amount shall be paid by the student according to the loan agreement with the bank which gave the education loan. For all the education loans of quality HEIs, there is a unified portal for loan application, which will be under the administrative control of the Department of Higher Education. Once the education loan is sanctioned by the banks and disbursed, the banks will update the same in the portal seamlessly. If any information submitted by the bank or the student is found to be incorrect at a future date, the student will be liable to refund the entire subsidy claim paid to her/ him. The lending bank will be responsible for recovery of this amount. In case of such detection; the student shall be debarred from any future benefit from any other government scheme. In addition, other legal procedures, as applicable under laws of the land might be initiated against such a student.
(The author writes on agricultural and social issues)