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

Who it concerns: 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.

What the committee found

• 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.

Also in the document

• Between February and August 2025, out of 55,887 applications under the PM-Vidyalakshmi scheme, 21,967 were disbursed, and several banks had not sanctioned even a single application.
• The limit for collateral-free education loans has not been revised since 2010, and the limit under Priority Sector Lending has not been revised since 2020, despite rising costs.
• Interest rates on education loans currently range between 7.5% and 15%.