**How H-1B Visa Fee Hike Impacts India’s Education Loan Market**
*By Dwaipayan Roy | Sep 20, 2025, 06:48 PM*
The recent increase in H-1B visa application fees by the United States government has sent shockwaves through India’s overseas education loan market. Industry insiders told Moneycontrol that demand for education loans has plummeted for the Fall 2025 academic season compared to Fall 2024.
Bankers attribute this decline to the US policy environment under President Donald Trump, a staunch critic of the H-1B program — a key pathway for international students seeking to enter the American job market.
### Market Shift: No Significant Move Away from the US
Despite the reduced demand, there has been no notable shift of Indian students towards other countries. The US remains India’s largest destination for overseas education loans. However, growing uncertainty around post-study work opportunities has led many families to reconsider their plans.
This slowdown comes after a period of rapid growth, where India’s education loan market enjoyed double-digit expansion since 2018. The surge was largely driven by India’s aspirational middle class and its large English-speaking student population.
### Regional Disparities and Market Slowdown
The decrease in education loan demand is especially visible in India’s western and northern regions. Reserve Bank of India (RBI) data shows that the growth of education loan outstanding in these regions has slowed between 2016 and 2024.
Meanwhile, the southern region continues to lead in outstanding education loans, with Tamil Nadu at the forefront. Despite this, even in the south, growth rates have tapered off for key lenders such as Credila Financial Services and Avanse Financial Services.
### Challenges for NBFCs Focused on Education Loans
Education-focused non-banking financial companies (NBFCs) like Credila and Avanse are facing heightened risks amid the slowdown. Both firms have primarily grown by financing overseas studies, especially master’s programs in STEM and management disciplines.
Credila disbursed over ₹15,000 crore in FY25 to more than six lakh students, while Avanse has expanded aggressively into Tier 2 and Tier 3 cities to capitalize on rising aspirational demand.
Together, these NBFCs increased their share of the education loan market from 11% in 2016 to nearly 45% by 2024, underscoring their significant role in this segment.
### Conclusion
The hike in H-1B visa fees, coupled with uncertain US immigration policies, has led to a noticeable slowdown in India’s overseas education loan market. While the US remains the prime destination, the market is seeing regional disparities and challenges for prominent NBFC lenders. How these companies adapt to changing dynamics will be crucial for the future of education financing in India.
https://www.newsbytesapp.com/news/business/us-visa-fee-hike-hits-india-s-education-loan-market/story
