The Bihar government has restructured the Student Credit Card Scheme, splitting the ₹4 lakh loan limit between the state finance corporation and commercial banks. This move has triggered significant political debate in the state.
- Up to ₹2 lakh will be provided via the Bihar State Education Finance Corporation.
- Loans between ₹2 lakh and ₹4 lakh will be facilitated through scheduled commercial banks.
- The scheme has been extended for five years, covering FY 2026-27 to 2030-31.
- Integration with the PM-Vidyalaxmi Portal allows for potential loans up to ₹10 lakh.
Patna: The Bihar government has implemented a significant structural change in the distribution of funds under its flagship Student Credit Card Scheme. Under the revised framework, the state will no longer provide the entire ₹4 lakh aid directly through its corporation. Instead, the funding will be bifurcated between the state's education finance body and scheduled commercial banks.
According to the new guidelines, students will receive up to ₹2 lakh through the Bihar State Education Finance Corporation. For the remaining portion of the credit, ranging from ₹2 lakh to ₹4 lakh, students must now approach scheduled commercial banks. The Higher Education Department has clarified that this is a change in the disbursement mechanism rather than a reduction in the total financial assistance available to students.
Why This Matters
BozokMedia analysis shows that this strategic shift aims to ease the fiscal burden on the state's direct finance corporation by leveraging the existing banking infrastructure. By linking the scheme with the PM-Vidyalaxmi Portal, the government is also providing a pathway for students to access much larger education loans of up to ₹10 lakh, effectively modernizing the state's educational financing ecosystem.
The transition from a single-source funding model to a multi-channel system reflects a move toward fiscal sustainability, though it may introduce new bureaucratic layers for students.
To support this expansion, the government has significantly increased the allocated budget. While ₹886 crore was approved for the 2025-26 period, the budget for FY 2026-27 has been raised to ₹950 crore, marking an increase of ₹64 crore. This extension ensures the scheme's continuity until the financial year 2030-31.
| Feature | Previous Model | New Model |
|---|---|---|
| Max Loan Limit | ₹4 Lakh (Single Source) | ₹4 Lakh (Split Source) |
| Funding Split | 100% State Corp | Corp (up to ₹2L) + Banks (up to ₹4L) |
| Budget (2026-27) | - | ₹950 Crore |
The policy shift has ignited a political firestorm. RJD leader Tejashwi Yadav has alleged that the state is facing a severe financial crisis, citing a fiscal deficit of 5.8% of GSDP in 2025-26. Yadav claimed that the change in rules is a sign of shrinking resources and mismanagement of state funds. However, the NDA government has dismissed these claims, asserting that the new system offers more diverse financing options for students.
Frequently Asked Questions
1. Does this mean the total loan amount has been reduced to ₹2 lakh?
No. The total assistance remains up to ₹4 lakh; only the source for the amount above ₹2 lakh has changed to commercial banks.
2. Will students with existing sanctioned loans be affected?
No, the government has confirmed that all previously sanctioned applications will remain unaffected by this new arrangement.
