By buld_online 
Punjab National Bank (PNB), one of India’s leading public sector banks, has announced a reduction in interest rates on education loans under the PM Vidyalaxmi Scheme. The bank has cut its rates by 20 basis points, aiming to make higher education more accessible to students across the country. The scheme, which was launched on 6 November 2024, provides financial assistance to students pursuing higher studies, focusing on those admitted to top-quality higher educational institutions (HEIs) identified through National Institutional Ranking Framework (NIRF) rankings.
The PM Vidyalaxmi Scheme is designed to offer comprehensive financial support to students who secure admission on merit to 860 identified Quality Higher Education Institutions across India. This initiative encompasses both government and private HEIs ranked within the top 100 NIRF rankings, state government HEIs ranked between 101 and 200, and all central government institutions. In total, the scheme initially covers 860 qualifying institutions, which collectively serve more than 2.2 million students.
Under the scheme, students can avail of collateral-free and guarantor-free loans to cover tuition fees and course-related expenses. A credit guarantee of 75% is provided for loans up to Rs 7.5 lakh to support banks in offering these educational loans. Furthermore, students from families with an annual income of up to Rs 4.5 lakh receive a 100% interest subvention for technical and professional courses. For those with annual incomes between Rs 4.5 lakh and Rs 8 lakh, a 3% interest subvention is available.
Additionally, the scheme offers a 3% interest subsidy on loans up to Rs 10 lakh during the moratorium period for students with family incomes of up to Rs 8 lakh who are not eligible for other government scholarships or interest subsidies. This interest subsidy is anticipated to benefit 100,000 students annually, prioritising those from government institutions and those enrolled in technical or professional courses. The government has allocated a budget of Rs 3,600 crore for the scheme from 2024-25 to 2030-31, with an estimated 700,000 new students expected to benefit from the interest subsidy over this period.
According to PNB, the reduction in interest rates further strengthens its commitment to enhancing education accessibility.
“The Vidyalaxmi Scheme is designed to provide comprehensive financial support to students towards quality-driven higher education. This initiative is available to candidates who secure admission on merit to 860 identified Quality Higher Education Institutions (QHEIs) across India,” the release said.
The application process for the PM Vidyalaxmi Scheme is facilitated through a unified portal, ensuring a streamlined and efficient process for prospective students. Loans are offered without the need for collateral, with parents or guardians listed as joint borrowers. The revised interest rate structure is institute-specific, starting from 7.50%.
Institutions covered under the scheme include QHEIs, HEIs within the top 100 in the NIRF ranking, and state government HEIs ranked 101-200. The list of eligible institutions will be refreshed annually based on the latest NIRF rankings, ensuring that students have access to quality education and financial assistance. The scheme’s annual update mechanism guarantees that only the most qualified institutions are included, aligning with evolving educational standards.
With over 2.2 million students potentially benefiting from this initiative, the PM Vidyalaxmi Scheme represents a significant step towards increasing access to higher education in India. By providing collateral-free loans and interest subsidies, the scheme aims to reduce the financial burden on students and encourage merit-based access to top educational institutions. This initiative not only supports students financially but also empowers them to pursue their academic aspirations without the constraints of financial barriers. The scheme’s focus on merit-based admissions ensures that deserving students receive the support they need to excel in their educational pursuits.