More than 1.12 lakh collateral-free and guarantor-free education loans have been sanctioned under the Centre's PM-Vidyalaxmi Scheme since its launch in November 2024, with the total sanctioned amount crossing Rs 15,634 crore.
According to the latest figures, 1,12,817 PM-Vidyalaxmi education loans had been sanctioned as of July 21, 2026. The scheme was introduced by the Government of India with the aim of ensuring that financial constraints do not prevent meritorious students from pursuing higher education.
Under the scheme, students who secure merit-based admission to eligible Quality Higher Education Institutions (QHEIs) can avail themselves of collateral-free and guarantor-free education loans if they wish to do so.
Interest subsidy available for eligible students
As per PIB reports, the PM-Vidyalaxmi Scheme also provides an interest subvention benefit for students from families with an annual income of up to Rs 8 lakh.
Eligible students can receive a 3% interest subvention on education loans of up to Rs 10 lakh. Up to one lakh fresh students each year can avail of this benefit, provided they are not receiving any other scholarship or interest subvention on an education loan.
The government has allocated Rs 3,600 crore for the period from 2024-25 to 2030-31. The funding is intended to provide the 3% interest subvention benefit to up to seven lakh fresh students during this period.
PM Vidyalaxmi portal simplifies loan applications
A dedicated online platform, the PM Vidyalaxmi portal, was launched to streamline the process for students seeking education loans and interest subvention. The portal has been operational since February 25, 2025, and allows students to apply through a simplified application process that can be accessed by participating banks.
The scheme is available through Scheduled Banks, Regional Rural Banks (RRBs) and Cooperative Banks. Currently, 12 public sector banks, 20 private banks, 25 RRBs and seven cooperative banks have been onboarded to the PM Vidyalaxmi portal.
The wider network is intended to help eligible students from different parts of the country, including those from rural, tribal and underprivileged communities, access financial support for higher education.
Aadhaar-based verification for interest subvention
The government has put in place Aadhaar-based de-duplication to ensure that only eligible students receive the interest subvention benefit.
Once an interest subvention application is approved, the student receives an SMS on their registered mobile number asking them to install the PM-Vidyalaxmi Digital Rupee App. After banks submit their claims, the government credits the interest subvention amount to the student's digital wallet.
The student can then opt to redeem the amount, following which the funds are transferred to the education loan account through Direct Benefit Transfer (DBT).
The release of interest subvention from the second year onwards is linked to the student's academic performance. QHEIs registered on the PM Vidyalaxmi portal can upload semester-wise progress reports of students, allowing their academic performance to be monitored.
Separate credit guarantee scheme supports education loans
Alongside PM-Vidyalaxmi, the Department of Higher Education is implementing the PM Uchchatar Shiksha Protsahan Credit Guarantee Fund Scheme for Education Loans (PM-USP CGFSEL).
Under this scheme, the Central Government provides a credit guarantee for education loans of up to Rs 7.5 lakh taken by students without collateral security or a third-party guarantee. By default, the scheme provides guarantee coverage of up to 75% of the loan amount.
Since the launch of PM-USP CGFSEL in 2015, 14,65,880 credit guarantees covering loans worth Rs 59,843.74 crore had been issued as of July 21, 2026
Education support linked to higher enrolment
The government has said that scholarships and education loans play an important role in helping meritorious and deserving students continue their higher education. Such financial support can also help reduce the number of students dropping out because of financial difficulties.
The Gross Enrolment Ratio (GER) in higher education has increased from 23.0 in 2013-14 to 30.0 in 2023-24. The PM-Vidyalaxmi Scheme is part of the government's broader efforts to expand access to higher education by providing financial assistance to eligible students, particularly those who may otherwise struggle to meet the cost of pursuing a degree.
