GoI’s recently announced PM Vidya Lakshmi Scheme (PVS) aims to ensure that financial hurdles don’t limit opportunities for students who want to pursue higher ed. PVS is a direct outcome of the central theme of NEP 2020 – making higher education inclusive, equitable and accessible for all.
Because our students come from diverse backgrounds, providing a level playing field to them in higher ed will help them reach their potential to excel. Expanding the talent pool by minimising financial hardships will play a transformative role and ensure that our workforce is diverse and competitive, bringing perspectives and innovations to the table.
Students from state- or central government-funded, or private HEIs, can benefit from PVS, provided these institutions rank within a specific range in National Institutional Ranking Framework (NIRF) rankings across categories. The idea is to ensure inclusion of students from different top HEIs pursuing diverse academic interests, and provide the opportunity to benefit from the best education available. The scheme will help nearly 22 lakh students from 860 institutions in the initial phase.
In PVS, benefits include:
- Access to loan amounts to cover full tuition fees and other expenses related to the course.
- For loans up to ₹7.5 lakh, a credit guarantee of 75% as security to the lending banks in case of a default.
- 3% interest subvention, or rebate on loans up to ₹10 lakh during the moratorium period for students from families with an annual income of up to ₹8 lakh. This will help students to focus on their studies without worrying about mounting debt.
Most Indian universities have a bank branch on their campus or nearby. Banks can leverage this physical proximity to reach out to students, ensuring they know the financial support available under the scheme. Many students, especially those from underprivileged backgrounds, may need to be educated about financial aid options under PVS. Banks should guide them through the loan application process, eligibility criteria and scheme benefits.
Along with university administrations, banks should promote PVS during key academic events like admission days and orientation programmes to ensure that students know the loan facility from the beginning of their educational journey. They should organise financial literacy workshops with the help of universities to help students understand long-term implications of taking an education loan and its management, budgeting and benefits of interest subvention. Students should be helped to make informed decisions about their financial future.
For banks, this engagement with students could well be basis for a long-term relationship for future financial needs like home loans, personal loans and investment opportunities. PVS has the potential to open many opportunities for banks beyond student loans.
We must try to saturate this scheme to realise financial inclusion of students from low-income groups and make Indian higher ed more inclusive.
The writer is chairman, UGC.