As restrictions eased, Indians began to fly out en masse, in search of greener pastures. The number of Indian students who went abroad to study too rose by close to 70 per cent in 2022, compared to 2021. According to the numbers shared by the Ministry of External Affairs in Rajya Sabha on February 9, a whopping 7.5 lakh Indians went abroad to study last year- an all-time high.

While 5.8 lakh Indian students went to pursue education in other countries in 2019, in 2020, it dipped to 2.59 lakh due to the pandemic. Even though the number rose in 2021, it was yet to catch up with the pre-pandemic levels.

Education loans disbursed

This trend also meant an increase in the number of education loans disbursed to Indian students studying abroad, according to the data shared by the Ministry of Finance in Lok Sabha on February 13. It says that in FY22 alone, Public Sector Banks in the country disbursed education loans for studying abroad worth 7,576.02 crore. This is a 68 per cent increase compared to FY21. According to RBI data, in FY22, PSBs disbursed close to 90 per cent of the total education loans in the country.

As expected, the amount of money disbursed as loans for studying abroad by PSBs was the lowest in FY21 - ₹4,503.61 crore. It was 23.5 per cent lesser than the amount disbursed in FY20.

Analysis of another dataset shared by the Ministry of Finance in Lok Sabha on December 19, 2022, says that the share of money disbursed as education loans for studying abroad was almost half of the total education loans handed out in FY22. In FY22, a total of education loans worth ₹15,445.62 crore was disbursed. Of this, ₹7,576.02 crore was for education abroad. In FY21, when pandemic-related restrictions were around, its share was just 26 per cent.

Experts believe that the share of education loans for studying abroad will only go up, now that the restrictions are eased.

“PSBs are increasingly looking to tap into the growing study abroad segment to expand their education loan portfolio,” said Ankit Mehra, CEO and Co-founder of GyanDhan, an education financing marketplace. “Low-value education loans of up to ₹7 lakhs constitute a bulk of the defaults, which has made banks reluctant to give loans of lower value. To compensate for the high NPAs stemming from this segment, banks will continue to opt for high-value loans given for education abroad or premier institutes in India,” he added.

Aditya Damani, Founder of Credit Fair, a Mumbai-based finance services platform, agrees. “There will always be an increase in demand for people to go abroad. This means the demand for loans for study abroad will also continue. The risk (for lenders) in terms of repayments are generally more for domestic education loans,” he said, cautioning that there may be a risk next year, considering the layoffs in the US.

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