US Student Visa Policy Tightening Hits Education Loans, Overseas Remittances See Sharp Decline

The tightening of the United States student visa policy is now showing a visible ripple effect beyond student admissions, significantly impacting India’s education loan sector and overseas remittances. Recent data and industry insights indicate a sharp slowdown in foreign education-related financial activity, particularly linked to US universities, which have traditionally attracted the largest share of Indian students.

According to Reserve Bank of India (RBI) data, the amount of money sent abroad for education purposes has declined noticeably across both major admission cycles—fall and spring—reflecting reduced student movement to the US.

Overseas Remittances Drop During Key Admission Seasons

The impact of stricter visa norms is clearly visible during the Fall Admission season

, which typically begins in August. During this period, outward remittances for overseas education fell by 23 percent, dropping from $416 million to $319 million. These remittances include not only tuition fees but also living expenses such as accommodation, food, and other essentials.

A similar trend was observed during the Spring Admission season, which starts in January. Outward remittances during this cycle declined by 18 percent

, falling from $449 million to $368 million. The consistent reduction across both admission windows highlights growing hesitation among students and families when it comes to pursuing education in the US.

Education Loan Sector Under Pressure

The decline in overseas education has directly affected the education loan market, which is heavily dependent on students heading to the US. Education loan providers, including banks and NBFCs, report that foreign education loan disbursements fell by 30 to 50 percent in 2025

.

Industry experts say this slowdown is primarily due to uncertainty surrounding visa approvals, longer processing times, and stricter scrutiny of applications. Many students are either postponing their plans or cancelling them altogether, leading to fewer loan applications and reduced disbursements.

Students Rethink the American Dream

The human impact of the policy shift is equally significant. Yash Patel from Ahmedabad, who aspired to pursue a degree from a leading US university, has now put his dream on hold. Like thousands of others, he believes studying in the US may not be feasible in the near future.

“Given the current visa uncertainty, the chances of studying in the US over the next two years seem very low. I am now exploring options in other countries,” he said.

Stories like Yash’s are becoming increasingly common, as students reassess their academic plans amid changing global immigration policies.

US-Linked Education Volumes Fall Sharply

According to Ankit Mehra, CEO and Co-founder of education loan platform GyanDhan

, education volumes linked to the US have dropped by nearly 60 percent.

He noted that uncertainty around visa approvals has made planning extremely difficult for students and lenders alike. “Given the current environment, our partners expect a further decline in US-linked education volumes in the upcoming fall season,” Mehra said.

The US has historically been the single largest destination for Indian students, both in terms of enrollment numbers and loan ticket size. As a result, the slowdown cannot be easily offset by growth in other regions.

Students Shift to Alternative Destinations

With the US becoming increasingly challenging, students are now turning to alternative destinations such as the United Kingdom, France, Germany, and parts of Eastern Europe

. These countries offer relatively more predictable visa processes and lower overall education costs.

However, industry experts caution that while these destinations are gaining popularity, they may not fully compensate for the decline in US admissions. American universities typically account for higher tuition fees and larger education loans, which play a crucial role in sustaining the loan ecosystem.

Outlook Remains Cautious

Looking ahead, experts believe that education loan disbursements are likely to remain subdued for the next one to two years

, unless there is a meaningful relaxation in US student visa policies. The slowdown poses challenges not only for lenders but also for fintech platforms, universities, and ancillary service providers linked to overseas education.

At the same time, the trend could push students and families to explore more cost-effective education destinations and alternative financing models, potentially reshaping the global education landscape.

Conclusion

The tightening of US student visa norms has triggered a chain reaction affecting students, lenders, and overseas remittance flows. While Indian students are adapting by exploring new destinations, the education loan sector continues to feel the strain of reduced US-bound volumes. Until clarity and stability return to visa policies, caution is likely to dominate overseas education planning.

Disclaimer:

This article is for informational purposes only. Financial decisions related to education loans and overseas study should be made after consulting qualified experts and reviewing official guidelines.