As visa curbs reshape student flow, NBFCs pivot to service newer destinations

Students are flocking to countries offering affordability, predictable visas, and strong post-study work options.

Non-Banking Financial Companies (NBFCs) specializing in education loans for foreign universities are navigating a complex landscape shaped by tightening visa policies in popular destinations like the United States (US) and Canada.

Despite short-term sentiment shifts, disbursements have remained robust, NBFCs have said, with students pivoting to alternatives with a clearer path. Lenders said they are resorting to adaptability in loan products, flexibility of repayment, along with a focus on Return on Investment (RoI) to sustain growth.

Visa Curbs Reshape Student Flow

The latest $100,000 fee for new H-1B visa petitions has disrupted the foreign education ecosystem too, particularly for those chasing American universities.

Jainesh Sinha, Co-founder & COO of GyanDhan, an end to end education enabler, said, "We have noticed a dip in applications to the US after the introduction of a $100,000 fee for new H-1B visa petitions and the many policy changes. However, this has not affected our loan disbursements, as students are choosing other countries instead."

GyanDhan's Study Abroad report has revealed that US-bound students have dropped from 54 percent in 2023 to 20 percent in the Fall of 2025. Canada too has seen a sharp decline with only 2 percent of GyanDhan students choosing it in September 2025, down from 11 percent in 2023.

Akshay Chaturvedi, Founder & CEO of Leverage Edu and Fly Finance, its financing arm too cited a knee-jerk impact. "Visa environments do influence short-term sentiment, but the long-term aspiration to study abroad remains deeply intact,"  said Akshay Chaturvedi, adding that education loan disbursements continue to grow steadily, though there’s been a shift in the mix. Fly Finance said it is seeing slightly less US-bound disbursals and a higher growth in Europe, Middle East and parts of Asia where visa and work pathways are more predictable.

Repayment trends have varied, GyanDhan’s Jainesh Sinha said, with that of the US staying steady, thus, lenders have not tightened eligibility norms. For the UK, however, repayment trends have turned weaker, and most lenders have tightened their loan eligibility criteria for students aspiring to study in the UK.

The repayment of UK student loans can be challenging because of several factors. For one, the higher interest rates on these loans can significantly increase the overall repayment amount, making it tougher for borrowers to clear their dues. Additionally, while the income-contingent repayment system is designed to be flexible - allowing repayments to be based on the borrower's income - it can sometimes result in longer repayment tenures. The UK's changing job market and potentially sluggish salary growth too can impact a borrower’s ability to repay, as those who are unable to secure well-paying jobs may struggle to make their monthly payments.

Emerging Destinations Drive Demand Surge

Students are flocking to countries offering affordability, predictable visas and strong post-study work options. Gyandhan said it has seen rising interest in Germany, up from 4 percent in 2023 to 9 percent in 2025. Ireland too saw an increase from 3 percent in 2023 to 7.6 percent in 2025. The UK too has seen an increase from 16 percent in 2023 to 39 percent in 2025.

Akshay Chaturvedi of Leverage Edu said, “Even Italy, Dubai and Japan have been strong beneficiaries of this shift. He emphasizes that even in restrictive cycles, most students proceed by altering destinations to study abroad.”

NBFCs are capitalizing on this diversification, said GyanDhan’s co-founder, Jainesh Sinha. "We have diversified our loan facilitation service to cover students targeting all countries, including India. This expansion has helped us grow disbursals despite policy turbulence."

Also Read | Here's how 8th Pay Commission will impact salary, pension and allowances

Adaptive Products and Risk Mitigation

Lenders are factoring in RoI and employability more rigorously now, NBFCs have said. Fly Finance said it is offering flexible repayment structures, extended loan approval validity for students facing visa delays, and support for those deferring their intake ensuring they don’t have to restart the entire loan process.

Akshay Chaturvedi said, “We intervene early to help students pivot to alternative destinations or universities where policy clarity is stronger.”

GyanDhan too has focused on end-to-end support for student who have opted for their products. "When students face visa-related repayment challenges, we collaborate with lenders to explore loan restructuring,” said the loan provider. Lenders are usually open to such requests from well-meaning borrowers with genuine difficulties, GyanDhan added.

To mitigate their risks, lenders are making students aware of several other options to repay. Many countries offer work permits, like the US' Optional Practical Training (OPT) or the UK's Graduate Route, allowing students to earn and repay loans even without full-time employment or a work visa. Additionally, lenders are also increasingly factoring in students' income potential if they choose to return to India.