Abroad Education Loan Applications Drop 22% Across India

India's overseas education landscape has faced significant changes over the past year. In  2023, more than 1.2 million students travelled abroad for quality education [1]. This number  was expected to reach 1.5 to 2 million by 2025 [2]. However, recent trends and data indicate a  major shift in these projections.  

Decline in Interest in Abroad Education?  

GyanDhan conducted an analysis between March 2024 and May 2024 to understand the  current trends. The report estimated a significant 22% drop in the number of students looking  for abroad education loans as compared to the same period last year. This decrease in interest  was even more pronounced in some states. Telangana witnessed a 30% drop and Gujarat, a  35% drop. Here is an overview of some other states: 

What is Causing This Trend? 

Many factors have influenced this declining trend. In the last three years, Indian students who  travelled to the US have been facing challenges in bagging jobs. One such student, Ankit  Kumar, an MS in Supply Chain Management graduate from the University of Texas at Dallas,  pointed out, “There’s a dark reality to studying in the US. Finding a job is not easy and not  everyone gets lucky enough to get a work visa.” He further added, “Working in non-tech fields,  especially in supply chain, has become tricky for immigrants to be able to survive." 

Canada’s imposition of caps on international student admission [6] [7], Australia’s introduction  of stricter student visa evaluations along with doubling of the fees [3] and the UK’s initial plan  to consider restricting student entries [4] [5] have all been motivators of this decline.  Together, these have made students and their families more careful about investing in an  overseas education.  

Future Outlook: Will It Get Better?  

The critical question is whether this trend will improve in the coming years. GyanDhan’s  analysis further examined aspirants' preparation for exams and their interest in universities.  Here are the findings for India as a whole:  

These declines are particularly significant in states like Telangana with a drop of 30% in  interest in GRE, Gujarat with a 43% drop in interest in TOEFL, and Punjab, with a 57.36% drop  in interest in IELTS. These numbers indicate that the upcoming intakes, Spring 2025 and Fall  2025, may continue to experience similar trends until substantial changes in policies come  into the picture.  

The Other Side of the Picture

The overseas education industry in India may have taken a hit, but this is just one side of the  story. International policymakers are soon to meet the results of economic forces. Over time,  the exponential rise in the number of students travelling abroad has become an income source  that many universities depend on [8]. A recent report highlighted many university staff layoffs  and course suspensions in the UK, Canada, and Australia [9]. This resulted from restrictive  government policies on international students, “reducing an important income stream.”  Despite these challenges, the demand for study abroad education loans continue to grow as  more students seek opportunities overseas. 

In Australia, the overseas student caps have agitated universities. In a submission to the  federal Department of Education, the University of Sydney says that no attempt has been  made to assess the impact of “arbitrary enrolment limits” on a university funding model that is  “heavily reliant” on international students’ fees [10]. Almost 44% of their income last year was  from foreign students. They’ve requested the department to “consider changes of this  magnitude extremely carefully”.  

Ankit Mehra, CEO of GyanDhan, emphasises the implications of the restrictive measures on  international students, “These measures not only affect universities but also hinder the  potential contributions of talented graduates to their country’s economy."  

This was also recently highlighted by Donald Trump in his landmark proposal concerning  international students. Preparing for the November presidential elections in the USA, he  proposed ‘automatic green cards’ for Indians graduating from the US. He added, after their  graduation, the brilliant students return to their country and “become billionaires”. [11] 

Most of the recent policy changes and proposals are driven by pandering to the voter base  given the impending elections in these geographies. Ankit Mehra further states, ”The  economic fallout of alienating the international student segment will be too significant for  these countries to ignore. We can expect a return to normalcy once the election cycles  conclude and the hype settles.“ 

The Silver Lining 

Despite the current challenges, there are many positive aspects one must consider. The  reduction in interest will likely weed out less scrupulous parties who do not prioritise students'  best interests. This market correction could lead to a more transparent and student-focused  industry.  

Another silver lining for the overseas education industry is the increasing affluence of the  upwardly mobile middle class. With the desire for superior educational opportunities, global  exposure, and better career opportunities, more parents are sending their children abroad for  undergraduate studies.

This surge can be seen in the GyanDhan analysis as well. There has been a notable 20%  increase in interest for the ACT and SAT exams in India, both prerequisites for undergrad  courses abroad. 

Additionally, the analysis highlighted a growing interest in countries apart from the traditional  destinations, the USA, the UK, Canada and Australia. Universities in Ireland, Germany and  Spain, among others, are witnessing a surge in interest among Indian students. For instance,  abroad education aspirants in Punjab have shown a 99% increase in interest in German  universities. Similarly, there is almost a 100% increase in interest in Irish universities among  aspirants in Gujarat, Telangana, Tamil Nadu, Andhra Pradesh, and Karnataka.