New Delhi, Nov 6 : Prime Minister Narendra Modi on Wednesday hailed the Union Cabniet's decision to approve the PM-Vidyalaxmi scheme, saying that it is a step towards Yuva Shakti empowerment.

'The Cabinet has approved the PM-Vidyalaxmi scheme to support youngsters with quality education. It is a significant step towards empowering the Yuva Shakti and building a brighter future for our nation,' PM Modi wrote on X.

He added that the step will be a big boost in making education more accessible.

Earlier, the Union Cabinet approved the PM-Vidyalaxmi scheme to provide financial support to meritorious students in a mission mode.

The mechanism will facilitate and drive the extension of education loans to meritorious students who get admission in the top 860 quality higher educational institutions of the nation, translating to covering more than 22 lakh students every year.

These students will be eligible to get collateral-free, guarantor-free loans from banks and financial institutions to cover the full amount of tuition fees and other expenses related to the course.

According to the Cabinet, for loan amounts up to Rs 7.5 lakh, the student will also be eligible for a credit guarantee of 75 per cent of outstanding default.

"This will give support to banks in making education loans available to students under the scheme," it said.

In addition, for students having an annual family income of up to Rs 8 lakh, and not eligible for benefits under any other government scholarship or interest subvention schemes, 3 per cent interest subvention for loans up to Rs 10 lakh will also be provided during the moratorium period.

"The interest subvention support will be given to one lakh students every year. Preference will be given to students who are from government institutions and have opted for technical/ professional courses," according to a Cabinet note.

An outlay of Rs 3,600 crore has been made from 2024-25 to 2030-31, and seven lakh fresh students are expected to get the benefit of this interest subvention during the period. This is in addition to the full interest subvention already being offered to students with up to Rs 4.5 lakh annual family income.

PM-Vidyalaxmi is another key initiative stemming from the National Education Policy, 2020, which had recommended that financial assistance should be made available to meritorious students through various measures in both public and private higher education institutions (HEIs).

The scheme will be applicable to the top quality higher educational institutions of the nation, as determined by the NIRF rankings - including all HEIs, government and private, that are ranked within the top 100 in NIRF in overall, category-specific and domain-specific rankings; state government HEIs ranked in 101-200 in NIRF, and all Central government governed institutions.

The Department of Higher Education will have a unified portal 'PM-Vidyalaxmi' on which students will be able to apply for the education loan as well as interest subvention, through a simplified application process to be used by all banks. Payment of interest subvention will be made through E-vouchers and Central Bank Digital Currency (CBDC) wallets.

/IANS