CURRENT AFFAIRS
CURRENT AFFAIRS
Description
The PM Vidyalaxmi Scheme was introduced to ease financial constraints for academically talented students across India. Its core goal is to make higher education more accessible by offering collateral-free loans. However, despite its promising objectives, the scheme has encountered several hurdles during implementation, particularly concerning technical issues and slow processing by public sector banks. As of April 2025, a significant percentage of applications still remain unresolved.
Overview Of Scheme
Rolled out in November 2024, the PM Vidyalaxmi Scheme focuses on providing education loans without the need for collateral or guarantors. Loans up to Rupees 7.5 lakh are covered under a government-backed credit guarantee, securing 75% of the unpaid loan amount in case of default.
Eligibility Requirements
Students whose families earn up to Rupees 8 lakh annually qualify to apply. They are eligible for a 3% interest subsidy on loans up to Rupees 10 lakh. Those from households with incomes under Rupees 4.5 lakh benefit from a full interest waiver under the PM-USP sub-scheme.
Application Procedure
The application process is intended to be user-friendly and completely online via a central portal. Yet, the system has faced several glitches such as server downtime and data migration delays, which have caused a backlog in processing student applications.
Government Response And Bank Involvement
To counteract low participation, the Ministry of Finance has asked public banks to initiate awareness drives and assist students in navigating the process. Additionally, banks have been encouraged to allow applicants to correct minor mistakes rather than rejecting applications outright.
Budget Allocation and Student Benefits
The scheme has received a budget of Rupees 3,600 crore for the period between 2024 and 2031. It aims to assist approximately seven lakh students per year through its interest subsidy program. Priority is given to students enrolled in technical and professional courses at government institutions.
Synergy With Existing Educational Schemes
The PM Vidyalaxmi Scheme is designed to complement other central initiatives such as the Central Sector Interest Subsidy (CSIS) and the Credit Guarantee Fund Scheme for Education Loans (CGFSEL). Together, these programs aim to create a more inclusive and supportive environment for students aspiring to pursue higher education.
Looking Ahead
The scheme is set to evolve, with annual updates expected to align with the National Institutional Ranking Framework (NIRF). As more institutions achieve NIRF recognition, the number of students eligible for the scheme is projected to grow, expanding educational opportunities nationwide.
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