Education loans for US and Canada fall, as students opt for alternative destinations

• US and Canada student loans fell 45% and 34% due to visa issues.
• Indian students now eye UK, Australia, Germany, Ireland, and new destinations.
• Applications to Europe and Australia surged by 150% in 2025

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Student loans for overseas education dropped sharply across the US and Canada by 45 percent and 35 percent on year-on-year basis, as students reassess their plans amid visa uncertainty and rising costs, according to edtech platforms that facilitate loans and train students for abroad studies.

This has forced Indian students to increasingly consider alternatives such as the UK, Australia, Germany, Ireland, Italy, New Zealand, and newer overseas education destinations, like the UAE and Singapore.

Executives at lending firms said the US and Canada, once the top choices for Indian students studying abroad, are now seeing a recalibration in demand as students weigh visa uncertainties, higher overall costs and shifting post-study prospects.

“The United States has seen a 45% year-on-year decline in loan volumes, while Canada has recorded a 34% drop,” said Ankit Mehra, Co-founder and CEO of Gyandhan, an edtech platform that works closely with NBFCs. “We are seeing a mixed but clearly evolving trend in study-abroad financing, with noticeable variation across destination countries.”

Gyandhan’s data indicated that other overseas education destinations recorded a strong year-on-year increase in student loan demand, though overall volumes have not yet returned to pre-Covid levels. While there has been a sustained student interest and growing confidence in the UK and Ireland, loan volumes across Italy and Germany grew despite limited targeted loan offerings.

The Reserve Bank of India (RBI) data show that education-related outward remittances —money sent from a resident’s Indian bank account to a foreign institution or the student’s overseas account— have eased in November after a spike in September 2025.

The remittances from India for overseas education under the Liberalised Remittance Scheme (LRS) fell to $120.94 million in November 2025, down 25.92 percent from October and 54.25 percent in September 2025. Overall, outward remittances for abroad studies totalled about $2.92 billion in FY2024-25.

Key education-loan lenders for overseas studies include SBI (collateral loans up to Rs 3 crore; rates from 8.90%), ICICI Bank (for 9% secured and 10.25% unsecured) and Axis Bank (from 10.81% for loans above Rs 4 lakh). NBFCs such as Avanse, Credila and InCred Financial Services also cater to this segment.

US study interest steady

Prodigy Finance, a UK-based lender that finances international students, says the US is still drawing robust application volumes from India, but visa uncertainty in 2025 has pushed many students to defer their plans and explore alternative destinations.

“To be honest, applications to the US rose by up to 60% as more students tried their luck. Some fortunate students even received visa approvals amid the uncertainty, forcing a significant number of students to defer their plans to alternative destinations in 2025,” said Sonal Kapoor, Global Chief Business Officer at Prodigy Finance.

According to their data, interest in the UK surged, with applications rising about 50 percent year-on-year. Students have actively built second and third choices, particularly in STEM subjects. Europe, in particular, along with Australia, emerged as a fast-rising option, with applications surging by 150 percent in 2025.