21,967 of 55,887 PM-Vidyalakshmi loans disbursed, others stalled

The Standing Committee on Education, Women, Children, Youth and Sports examined schemes for education loans and financial accessibility in higher education to address declining access and rising costs for students. This matters to citizens as it impacts the affordability of higher education and the ease of obtaining necessary financial support.

Ministry of Education (specifically the Department of Higher Education), Reserve Bank of India (RBI), Department of Financial Services, and banks providing education loans. The public affected includes students seeking higher education, particularly those from disadvantaged sections, rural backgrounds, and first-time borrowers.

• Committee observed a decline in the number of active educational loans from 23 lakh in 2014 to 21 lakh in 2025, despite total credit rising to Rs 1.37 lakh crore, indicating reduced accessibility.
• Committee recommended prioritizing students below the poverty line for loan sanctions and noted low awareness of interest rebate schemes among disadvantaged and rural students.
• Committee recommended the Department of Higher Education collaborate with RBI and the Department of Financial Services to determine a uniform, reasonable interest rate, noting current rates range between 7.5% and 15%.
• Committee recommended revising collateral-free loan limits (unchanged since 2010) and Priority Sector Lending limits (unchanged since 2020) to reflect rising education costs.
• Committee recommended exempting families receiving free rations from CIBIL score requirements and conducting periodic independent audits to ensure credit models are not discriminatory against economically weaker sections.
• Committee recommended extending the PM-Vidyalakshmi scheme to cover institutions beyond the 902 specified HEIs and issuing strict guidelines for timely sanctions and disbursement, noting that several banks had not sanctioned a single application between February and August 2025.
• Committee recommended increasing the moratorium period from one year to two years and allowing income-based installment repayment models.
• Committee recommended establishing a dedicated student grievance portal integrated with RBI’s ombudsman platform and appointing a nodal officer in each bank branch to provide technical support to students.

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