The agitating lot, under the banner of Students Federation of India, claimed the payment of scholarship has "stopped since last one year."
The students, who protested in front of the ministry today, also claimed the NGOs involved in the scholarship scheme had forged an "unholy nexus" with some private colleges and were duping the students.
According to the scheme, the scholarship amount is received by the colleges from designated NGOs, which is then reimbursed by the Centre.
The represenation made by the students to the ministry said many NGOs in the Valley have sprung up which have misguided the students and their families to take admission in "third rate" private colleges.
"The ministry must intervene in the issue of harrasment of students by the administration of private colleges and provide relief," the SFI representation said.
The students also demanded the cap of 5,000 students should be removed so that more and more of them can avail of its benefits to pursue higher education.