It doesn't take long to notice that many Indians aspire to pursue higher education abroad. Also, studying abroad seems to be the latest cash cow in India post-pandemic era as there has been a significant increase in international institutes focusing on test preps for IELTS, TOEFL, and GRE, and catering to other services like university shortlisting, visa application, SOP writing, and more.
Language proficiency tests are the first of the many steps for education abroad, especially for English-speaking countries, which are predominantly a student’s favorite. Then comes the financial institutions in the picture, which provide students with significant funds to cover their tuition fees, living expenses, etc.
The dramatic shift in the banking ecosystem bolstered students to procure education loans from public and private sector banks. However, let us not forget that banks in India are business-centric, and the objective of welcoming study-abroad applicants is to enhance their institute’s structure to emerge as a leading financial institution. The bright side here is that study abroad applicants are provided with non-collateral loans, especially for the middle-class and needy who cannot self-fund. This gives rise to innumerable abroad education loan applications across the country.
International education, it seems, is the latest cash cow in India. In recent years, it has spawned an entire industry of consultants, prep classes and tuitions, and financial services catering to sending students abroad. The ecosystem is self-referential, its extant elements feeding off each other.
Around 1.3 million Indian students are studying abroad for 2022, with the US being their top choice, as per the Ministry of External Affairs. Also, amid the Pandemic, Study Abroad Numbers Plummet: 2020 Witnesses a Sharp Decline from 5.9 Lakh to 2.6 Lakh Students Going Overseas. (Source: The Hindu.com)
Despite the challenges posed by the pandemic, Indian students remained committed to pursuing global education. Let's delve into the top five countries Indian students chose for their overseas education in 2022.
TOP 5 COUNTRIES FOR INDIAN STUDENTS 2022
- USA – 1,90,512
- Canada – 1,85,950
- United Kingdom – 1,32,709
- Australia – 59,044
- Germany – 20,684
Approximate Tuition Fee Per Annum:
- USA – 40 Lakh
- Canada – 19 Lakh
- UK – 10 Lakh
- Australia – 10 Lakh
- Germany – 2.5 Lakh
No. of Indian Students Going Abroad
- 2017: 4,54,009
- 2020: 2,59,655
- 2022: 7,50,365 Sourced From (leverageedu.com)
NBFCs Revolution in Education Loan
In the past, it was primarily the privileged elite who could afford to send their children abroad for education. However, the landscape has evolved, with a substantial increase in middle and upper-middle-class families choosing international education for their offspring. This shift has been reinforced by the accessibility of convenient financing options from banks and Non-Banking Financial Companies (NBFCs), which have recognized the immense potential of providing study-abroad loans.
Since its inception in 2021, the NBFC platform has been utilized by nearly 50,000 students, resulting in almost 9,000 successful loan applicants who have secured a combined total of $165 million. It's worth noting that 87% of loan recipients are from Tier II, III, and IV towns, while 23% come from families with an annual income below ₹5 lakh. The platform operates under a student-friendly model. Grad Right co-founder Aman Singh explains that its revenue is generated through partnerships with banks and registered colleges, ensuring students can access the platform for free.
The study abroad craze is not just a craze anymore becauseit is estimated that out of all the 586,000 Indian students studying abroad, over 66% reside in the USA, Canada, and Australia. Also, around 1.8 million Indians are expected to spend $85 billion on overseas education by 2024. (RedSeer.com)
Conclusion:
To sum up, abroad education in India is going through a significant transformation. Previously, studying abroad was mainly for the wealthy, but now, many middle and upper-middle-class families are also considering foreign education for their children. This shift is largely due to the support of banks and Non-Banking Financial Companies (NBFCs) that offer more accessible study-abroad loans.
This surge in accessibility and the willingness of institutions to support students in their pursuit of global education bode well for India's educational landscape. It broadens the horizons for students and promises a more diverse and enriched pool of talent ready to contribute to the ever-evolving global economy. As we move forward, the potential for education abroad will grow, creating more opportunities and fostering a brighter, more interconnected future for Indian students.
Sulekha Canada
Sulekha US