Visa rules for international students are constantly changing. There has been a growing emphasis in recent years on encouraging international students to study abroad. As a result, many nations have changed their visa policies to make it easier for students to get study permits and stay after graduation.

The new changes have influenced students’ decision-making when it comes to studying abroad. The rising popularity of foreign education shows that an increasing number of students from tier 2 and 3 cities are choosing international education and also looking for education loans to bridge the gap between university course costs and own funds.

Rajesh Kachave, Chief Business Officer, Student Lending and Insurance Business, Avanse Financial Services shares some interesting insights with Financial Express Online on new visa regulations impacting students’ journey abroad and the changing trends in the education sector.

Visa rules for international students have been evolving. How have these changes impacted the decision-making process for students who want to study abroad?

Indeed, visa regulations for international students have undergone significant transformations, and these alterations have created an array of opportunities for Indian students aspiring to study abroad.

For instance, the US has introduced student-friendly visa policies for international graduates in STEM fields, allowing them to apply for post-graduation work permits for 24 months. This change has emerged as a game-changer for Indian students, as it not only incentivises them to opt for STEM courses but also grants them additional time to secure employment and manage their education loan repayments.

The UK’s Graduate Visa allows students to stay in the UK for 2-3 years, depending on the study program, post-completion of their higher studies. Also, Canada has always been popular for its student-friendly visa policies. In fact, it offers a post-graduation work permit for up to 3 years, enabling students to transition from academics to work smoothly. Furthermore, these popular study abroad destinations allow students with valid student visas to work part-time for up to 20 hours per week, and Australia has even extended the work hours to 48 hours per fortnight from July 2023 to address the labour shortages.

Indian students now carefully evaluate these visa policy shifts during their decision-making process. They assess factors such as the potential return on investment, the duration required to secure employment, and how this aligns with their financial strategies and loan repayment schedules. In fact, changes in visa rules have evolved into a pivotal component governing the selection of a destination while studying abroad as well as the corresponding financial groundwork.

Can you provide insights into the latest trends you’ve observed in Indian students pursuing education abroad, especially regarding the growing number of students from tier-2 and 3 cities opting for international education?

At Avanse, we have witnessed a substantial surge in the demand for education loans during the fiscal year 2022-2023, particularly from tier II and beyond cities. Over 60% of students funded during this phase were from tier II & III cities.

Additionally, there has been a notable increase in the number of female students pursuing higher education in India, especially in traditionally male-dominated fields like STEM (Science, Technology, Engineering & Mathematics) courses. In FY2019-20, the number of women students funded from tier II & beyond cities was sub-10%. During FY2022-23, we witnessed a rise in the contribution from these cities. The female contribution from these cities has grown significantly. The male-to-female ratio is almost equal for students funded from smaller towns.

What are the key factors driving the increasing demand for education loans among Indian students aspiring to study abroad?

Over the years, students’ aspiration to gain quality education has grown. Furthermore, students consider exposure to new views and cultures crucial to developing a global outlook and, hence, choose to study overseas.

According to the Education Ministry, cumulatively, more than 30 lakh Indians went overseas for higher education between 2017 and 2022 to fulfil academic aspirations.

Several factors are driving the demand for education loans among Indian students aspiring to study abroad. The rising cost of overseas education is a significant factor. Tuition fees, living expenses, and other related costs can be substantial, making education loans a possible solution to bridge the financial gap.

Furthermore, the allure of prestigious foreign universities and the desire for world-class education motivate Indian students to explore opportunities abroad. Moreover, the competitive job market favours candidates with global exposure and qualifications, encouraging students to seek global education, even if it requires financial assistance.

The easy availability of flexible and student-friendly loan options from financial institutions caters to the growing demand, making it more accessible and manageable for students. These factors combined highlight the growing importance of student loans in fulfilling the aspirations of studying abroad.

What are the most commonly preferred destinations for studying abroad?

Indian students continue to prioritize the United States of America as their premier destination for higher education due to its prestigious universities, diverse academic programs, and abundant opportunities for research, internships, and career prospects. While the UK, Canada, Germany, Ireland, Australia, New Zealand, and similar countries remain popular choices among students. There’s a noticeable trend of increased interest in pursuing higher education in nations like the UAE, Saudi Arabia, and several Nordic countries such as Denmark, Sweden, Finland and more.