Education loans help students and parents to manage the high and rising cost of higher education in premier institutions. It removes the financial hurdle for a student to study at a university or any other institution of higher education in India or any university abroad to pursue their career goals without any worry of discontinuation when household savings deplete when they are spent for other contingencies. The PM Vidyalaxmi scheme launched in 2024 is a laudable initiative by the central government, as it introduced a special loan product to enable collateral- and guarantor-free education loans to meritorious students who get admission to the top-quality higher educational institutions in the country. The observation by the Parliamentary Standing Committee on Education, Women, Children, Youth and Sports that the disbursal of educational loans under the PM Vidyalaxmi scheme has been much less compared to the sanctioned amount lays bare the structural and procedural bottlenecks in the scheme. A key observation of the parliamentary panel highlights the hurdle posed by linking the credit history of the borrower with the assessment of repayment capacity for first-time borrowers belonging to poor and low-income households. The committee has found that the Reserve Bank of India (RBI) mandating that public sector banks, private banks and non-banking financial companies seek Credit Information Reports (CIR) of parents of students who are applying for education loans under various government schemes is problematic. The committee observes in its report that the majority of the country’s population does not have any credit history or the accompanying CIBIL score, and even though the RBI’s Master Directions advise lenders to not reject first-time borrowers’ loan applications just because they have no credit history, the requirement for a CIR/CIBIL score nevertheless poses a hurdle for this section of society given the discretion available to the bank officials. The Committee’s recommendation for the Department of Financial Services and RBI to issue categorical mandatory guidelines to all banks and financial institutions to exempt CIBIL scores/CIR for families which are getting free rations on their ration cards and adopt alternative evaluation criteria such as parental occupation, income sources, or school certification to assess repayment capacity is pragmatic, and if accepted by the government and implemented, then a large section of students can hope to pursue their career goals by availing education loans. The committee expresses its concerns over the decline in the accessibility of education loans over time, even as educational costs have risen rapidly, and points out that the number of active student loans fell from 23.36 lakh in 2014 to 20.63 lakh in 2025, but the total credit amount has increased steeply, suggesting much higher borrowing per student due to the rise in the cost of higher education during recent years. The Committee’s recommendation that the Department of Higher Education and Department of Financial Services should take sincere efforts to ensure education loans to the maximum number of students in the country and all families Below Poverty Line (BPL) should be accorded priority in sanctioning of education loans for higher education. It is timely advice to the government to build human resources to achieve India’s goal of transforming into a global knowledge superpower. The Committee’s recommendation for an inclusive approach in the accessibility and disbursement of educational loans is not just about social justice but is more about India not missing the opportunity of grooming every single talent in the country, irrespective of their economic background, by ensuring their access to quality higher education. The recommendation for a mandatory district-wise dashboard for monitoring of education loans, ensuring transparency in their sanctioning and disbursement, and all banks publishing district-wise and institution-wise data regarding loan sanction, rejection, and disbursal in near real-time will bring more transparency in the implementation of the schemes and policies related to educational loans. The committee found that only students pursuing higher education in a select list of quality higher education institutions are eligible to avail educational loans under the PM Vidyalaxmi scheme, and this norm excludes students from other institutions. It recommends extending the scheme benefits to students from other institutions so that more students across the country can pursue higher education without financial worries. Currently, the moratorium period under various education loan schemes is up to the study period plus one year in all courses, but the committee insists that the moratorium period for the repayment of student loans should be extended to two years after course completion, as graduates often find difficulty in getting jobs, and an extension of the moratorium will give graduates more time to secure stable employment opportunities before having to pay back their student loans. It is equally important that the curriculum and syllabus of higher education institutions are dynamically revised so that, in addition to strengthening knowledge, the education students receive also enhances their employability across diverse sectors and reduces concern among banks and financial institutions regarding education loan repayment.