Education Loans Take A Hit As Indian Students Move Away From US Dream; These Are Top 3 Choices Now – News18

Last Updated:April 18, 2025, 17:11 IST

Indian students are rethinking studying in the US due to strict visa policies and job market uncertainties, causing a drop in education loan demand

Indian students are reconsidering their plans to study in the United States due to the country’s stringent visa policies and job market uncertainties. This shift has led to a decrease in the demand for education loans, with loan lending companies now prioritising students with strong profiles and those admitted to top universities. Consequently, the number of loan approvals has declined.

Some students may return to the US midway through their studies, necessitating a restructuring of their loans. A report indicates that between March 2024 and 2025, the US has cancelled visas for 901 international students, resulting in a 28% decline in the number of Indian students choosing the US for higher education. This trend has increased interest in studying in other countries like the UK.

Loan lending companies are now exercising greater caution, offering loans only to strong candidates and prestigious universities due to heightened concerns over job loss and visa cancellations in the US. As a result, the number of students heading to the US is decreasing, causing financial losses for these companies.

According to a Times of India report, US loan applications for companies like InCred Finance have halved since last year. If the US government discontinues the OPT (Optional Practical Training) and STEM OPT programs, the number of students going to the US will decrease even further.

“The US business (industry-wide) is down by half already and will decline even more if the Trump administration’s anti-immigration and America First approach get strengthened further. If the OPT (optional practical training) and STEM OPT programmes are stopped, the demand for US courses will, in all likelihood, significantly dwindle,” Nilanjan Chattoraj, director, education loans at InCred Finance, was quoted as saying by Times of India.

However, the demand for studies in the UK, Canada, and Australia is on the rise, providing some relief to loan companies. Nevertheless, some students currently studying in the US may return midway, prompting companies to prepare for changes in loan terms.

“RBI does allow certain flexibility in restructuring such accounts.We have the regulatory models in place. As of now, only 1-2% of students required it, but that is expected to now jump to 5%. It is going to be tricky,” Chattoraj was quoted as saying in the TOI report.

Akshay Chaturvedi, CEO of Leverage, notes that while students going to the US are still getting loans, the scrutiny has become more stringent, with increased inquiries about backup plans and university transfers among students.

“Lenders are factoring in perceived immigration risks and ROI (return on investment) uncertainty. We are also seeing a spike in queries about transfer options (credits transfer to a different university in a different destination) and backup plans,” Chaturvedi said speaking to TOI.

According to a report by the Associated Press, at least 901 students from various countries studying at 128 colleges and universities in the US had their visas revoked or legal status terminated since mid-March.

International student enrolments in the US decreased by 11% between March 2024 and 2025, with a significant 28% drop in Indian enrolments, stated Sonal Kapoor, global chief business officer at London-based Prodigy Finance, citing data from market intelligence firm ICEF Monitor. As a result, countries like the UK are becoming popular alternatives for Indian students.

According to a report by the Associated Press, at least 901 students from various countries studying at 128 colleges and universities in the US had their visas revoked or legal status terminated since mid-March.

International student enrolments in the US decreased by 11% between March 2024 and 2025, with a significant 28% drop in Indian enrolments, stated Sonal Kapoor, global chief business officer at London-based Prodigy Finance, citing data from market intelligence firm ICEF Monitor. As a result, countries like the UK are becoming popular alternatives for Indian students.