Study abroad remittances from India at lowest level in eight years
In its monthly bulletin, the Reserve Bank of India released new data tracking how much money Indian residents send abroad for various purposes.
The data shows that for “studies abroad” – which includes tuition fees, accommodation, living expenses, application or admission fees, and other overseas education-related charges – about $1bn was spent between April and August 2025, the peak months for such remittances.
While actual spending could be slightly higher if parents send money to students as pocket money under the “maintenance of close relatives” category, study abroad remittances for the April-August period have fluctuated over the years.
After $787.8m was spent in 2017, remittances rose in 2018 ($1.31bn) and 2019 ($1.95bn), reflecting India’s growing international student population, before dropping sharply in 2020 ($1.12bn) due to the Covid-19 pandemic and surging again in 2021 ($2.37bn), as borders opened up.
From 2022 ($1.48bn) to 2024 ($1.28bn), remittances gradually declined, with 2025 ($1bn) now recording the lowest April-August outflows since 2017.
Just in the past year, study abroad remittances have dropped by $280m, a 22% decline between 2024 and 2025, aligning with the roughly 15% fall in Indian students studying abroad in 2024, even as emerging study destinations, such as Germany, France, and Russia, saw an uptick.
“Part of the decline reflects a slowdown in the number of Indian students heading to the US, a destination dominated by world-class but expensive private universities like Harvard and Stanford.
“At the same time, more students are exploring affordable options in Europe, where high-quality public universities offer far lower tuition,” Rahul Subramaniam, founder, Athena Education, told The PIE News.
With Fall semester starting at US universities, Indian student arrivals to the country have fallen to the lowest since the Covid pandemic, an over 45% decrease compared to the corresponding period last year, as increasing visa uncertainty and the Indian rupee’s historic lows against the US dollar are being cited as major factors behind declining interest.
Similarly, in Canada, 80% of Indian study permits were rejected in 2025 as the country continues to see major declines in international student arrivals.
Moreover, with the UK set to cut down its coveted Graduate Route visa and Australia continuing to maintain strict control over international student enrolments at its universities, the ‘big four’ countries are now facing a major upheaval in their once-indomitable international education sectors.
While Indian students’ growing preference for emerging study destinations – including Asian countries like Japan and South Korea, European nations such as Germany, France, Ireland, Italy, and Finland, and Middle Eastern and Central Asian destinations – especially for undergraduate and medical studies, has possibly contributed to lower spending on studying abroad compared to previous years, an increasing number of students are also availing education loans in the country, helping them manage potential extra costs.
According to ratings agency Crisil Limited, education loans are expected to remain among the fastest-growing segments for non-banking financial companies (NBFCs) in India, having recorded over 50% growth in assets under management (AUM) in recent years.
“While the overall pace of growth may moderate this year, the education loan market remains strong, especially among non-banking financial companies (NBFCs), which recorded 48% growth in 2024/25 and an impressive 77% growth the previous year,” stated Subramaniam.
But despite their growth, many students are now using education loans for domestic programs, particularly MBAs, which have seen a 12% rise in applications, as overseas loans are being offered under increasingly stringent terms due to limited opportunities abroad, experts say.
“I would say 2023/24 was the peak year because everyone was funding aggressively. Many lenders, including larger banks, found some comfort in repayment. Eventually, however, they could end up with a bad portfolio from these countries,” stated a senior banking official, who asked not to be named, specialising in education loans and financing.
“The old model – funding students based on future income abroad – is not working because people are not getting jobs. Now, we prioritise applicants with strong financial backgrounds. Previously, we funded applicants with salaries of Rs 30-40,000, but that is no longer sustainable. Banks need to secure their portfolios,” the official added.
While the overall pace of growth may moderate this year, the education loan market remains strong
Rahul Subramaniam, Athena Education
Students are also increasingly seeking scholarships and programs that offer stipends, allowing them to avoid paying the full cost of courses and accommodations.
“For instance, the proportion of Chevening Scholars from smaller Indian towns has risen from under 20% in 2015 to nearly 60% this year,” stated Subramaniam.
“We’ve seen a notable increase in students receiving substantial scholarships from top universities in the UK and US, including Oxford. Many US institutions, such as Princeton, have also expanded their financial aid programs, allowing some of our students to attend tuition-free.”
Another student, who is currently in her final year in the UK, described how her course helps her be less dependent on her parents: “For the most part, I took a loan to cover my fees. Last year I paid some expenses myself, with a little help from my parents, but this year I have a stipend that covers my rent for one term, which makes me much less dependent on them.”
Overall remittances under the LRS, which allows resident individuals to remit up to $250,000 per financial year for permissible current or capital account transactions have seen a significant decline, with reports suggesting a 17.7% year-on-year drop in August 2025 to $2.6bn.
This comes despite the threshold for Tax Collected at Source (TCS) on LRS transactions being raised from Rs 7 lakh to 10 lakh ($8,400–$12,000), a move that was expected to ease transactions for travel and other foreign payments.
While a range of factors are influencing consistently lower study abroad remittances, a new report by Redseer Strategy Consultants and Wise found that Indian families supporting their children’s education abroad lost Rs 1,700 crore ($200 million) in 2024 to hidden charges like exchange rate markups and banking fees, underscoring the growing financial strain on families from the lower middle-income country.
“That’s why the financial industry should work together toward greater transparency, so families and students can put every rupee towards what truly matters: their education,” stated Taneia Bhardwaj, South Asia expansion lead at Wise, as reported by the Economic Times.
“For parents who are making big sacrifices to support their children’s dreams, being hit with hidden fees in the form of exchange rate markups is both frustrating and unfair.”
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