Indian students rethink US plans: Education loan firms panic as enquiries drop by 50% - The Economic Times
Indian education loan companies are experiencing a slowdown as students reconsider studying in the U.S. due to the Trump administrations immigration crackdown and fears of a tariff-driven recession. With 50–75% of disbursements linked to U.S.-bound students, lenders are tightening approval...
Indian students rethink US plans: Education loan firms panic as enquiries drop by 50%
Agencies
Synopsis
Indian education loan companies are experiencing a slowdown as students reconsider studying in the U.S. due to the Trump administration’s immigration crackdown and fears of a tariff-driven recession. With 50–75% of disbursements linked to U.S.-bound students, lenders are tightening approval criteria, favoring strong academic profiles and top-tier universities. As a result, the pool of eligible applicants is shrinking, affecting business.
By ET Online
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Apr 18, 2025, 10:55:00 AM IST
India's education loan companies are facing collateral damage from the Trump administration's crackdown on immigrants. Since the U.S. accounts for 50–75% of their loan disbursements, many lenders are seeing a slowdown in business as students reconsider studying in America.
Lenders are tightening their evaluation processes for U.S. education loans, prioritising applicants with strong academic profiles and admissions to top-tier universities. This cautious approach stems from growing concerns about students' ability to repay loans, given the uncertain political climate and potential hiring slowdown in the U.S. due to fears of a tariff-induced recession. As a result, the pool of eligible U.S.-bound applicants is shrinking, affecting overall business. In addition to traditional banks, several NBFCs and modern financial or study-abroad platforms—such as Credila, Avanse Financial Services, and InCred Finance—are active players in India's higher education loan sector.
For some firms like InCred Finance, enquiries and applications for US loans have halved compared to last year. "The US business (industry-wide) is down by half already and will decline even more if the Trump administration's anti-immigration and America First approach get strengthened further. If the OPT (optional practical training) and STEM OPT programmes are stopped, the demand for US courses will, in all likelihood, significantly dwindle," Nilanjan Chattoraj, director, education loans at InCred Finance, told TOI.
While the demand to study in other countries like the UK, Australia, and Canada will provide some cushion to firms, they are, in the interim (for existing US loans), preparing to resort to regulatory models that allow them the flexibility to restructure loans and recover payments, given the threat of many students having to come back without completing studies and getting jobs, said industry executives. "RBI does allow certain flexibility in restructuring such accounts. We have the regulatory models in place. As of now, only 1-2% of students required it, but that is expected to now jump to 5%. It is going to be tricky," said Chattoraj.
Loans for the US are still being granted, but approval rates have tightened for US-bound applicants, said Akshay Chaturvedi, founder and CEO at Leverage, which partners with banks and NBFCs to provide education loans. "Lenders are factoring in perceived immigration risks and ROI (return on investment) uncertainty. We are also seeing a spike in queries about transfer options (credits transfer to a different university in a different destination) and backup plans," Chaturvedi said, adding that interest in studying in the US has not collapsed, but students are being more cautious.
A report by Associated Press said that, in the US, at least 901 students (overall from across countries) at 128 colleges and universities had their visas revoked or legal status terminated since mid-March. International student enrolments in the US fell by 11% between March 2024 and 2025, with Indian enrolments dropping by 28% during the period, said Sonal Kapoor, global chief business officer at London-based Prodigy Finance, citing data from market intelligence firm ICEF Monitor. Countries like the UK are emerging as alternatives for Indian students.
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