Indian Study Abroad Spending Hits Eight-Year Low: What's Behind the Decline?

The Reserve Bank of India recently released data that should make all of us sit up and take notice. Between April and August 2025, Indian families sent just $1 billion abroad for their children's education. To put this in perspective, this is the lowest figure since 2017 and represents a staggering 58% drop from the post-pandemic peak of 2021. For those in international education, the writing is on the wall. The golden era of unfettered growth may be drawing to a close with Indian study abroad spending hitting an eight-year low. In this blog, let's go into what precisely is causing such an unprecedented decline in international enrolments. 

After $787.8 million was spent in 2017, remittances rose steadily in 2018 and 2019, reflecting India's growing international student population. The pandemic hit hard in 2020, bringing numbers down to $1.12 billion, before they surged to an impressive $2.37 billion in 2021 as borders reopened. From there, it's been a steady decline: $1.48 billion in 2022, $1.28 billion in 2024 and now $1 billion in 2025. The math is clear and increasingly difficult to ignore.

The big four face a reckoning

The United States, long a favourite destination despite its expensive private universities like Harvard and Stanford, has seen Indian student arrivals fall to the lowest levels since the Covid pandemic. That's a 45% decrease compared to the corresponding period last year. Visa uncertainty and the Indian rupee's historic lows against the US dollar are being cited as major factors. As surprising as it may seem, the country that once dominated international education is now watching students look elsewhere.

Canada presents an even grimmer picture. In 2025, a full 80% of Indian study permits were rejected. The UK is set to cut down its coveted Graduate Route visa. Australia continues to maintain strict control over international student enrollments at its universities. The 'big four' countries are now facing a major upheaval in their once-indomitable international education sectors. What worked flawlessly when the academic community was more tightly knit has become impractical and increasingly unwieldy.

A new era of opportunities 

However, Indian students haven't lost their appetite for international education. They've simply changed things on the menu. Germany, France and Russia have seen an uptick in enrollments. Japan, South Korea, Ireland, Italy and Finland are drawing students, particularly for undergraduate and medical studies. Their appeal is straightforward: high-quality education without the eye-watering price tag.

"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," explains Rahul Subramaniam, founder of Athena Education. "At the same time, more students are exploring affordable options in Europe, where high-quality public universities offer far lower tuition."

The scholarship renaissance

Students are getting smarter and more proactive about funding. Scholarships and stipend-based programs are no longer nice-to-haves but necessities. The proportion of Chevening Scholars from smaller Indian towns has risen from under 20% in 2015 to nearly 60% this year. Princeton and other US institutions have expanded their financial aid programs, allowing some students to attend tuition-free.

One student currently in her final year in the UK describes her approach with refreshing clarity: "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."

The education loan dilemma

Education loans remain one of the fastest-growing segments for non-banking financial companies in India, having recorded 48% growth in 2024/25. However, with growing uncertainty around international education and immigration policies, lenders are pulling back. A senior banking official who specializes in education loans puts it bluntly: "The old model, funding students based on future income abroad, is not working because people are not getting jobs."

"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 adds. Many students are now using education loans for domestic programs, particularly MBAs, which have seen a 12% rise in applications.

The future is here and it's different

The million dollar question for international education institutions today is not what you'd expect to hear. To assume Indian students will continue flocking to expensive Western universities is far beyond the modern picture. Students have more options than ever, plenty of quality institutions to choose from and therefore, careful calculations to make. The million dollar question is not if the traditional destinations will face challenges. Rather, it is how quickly they can adapt to a student population that's learned to be savvier with their money.

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