**How H-1B Visa Fee Hike Impacts India’s Education Loan Market**
*By Dwaipayan Roy | Sep 20, 2025*
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 have revealed to Moneycontrol that the demand for such loans has significantly dropped for the Fall 2025 academic season in comparison to Fall 2024. Bankers attribute this decline to the US policy environment under President Donald Trump, who has been a vocal critic of the H-1B visa program—a key channel for international students seeking employment in the American job market.
### Market Shift: No Significant Move to Other Countries
Despite the reduced demand, there has been no notable shift towards other study destinations. The US remains India’s largest market for overseas education loans. However, growing uncertainty around post-study work opportunities is causing many families to rethink their plans.
This slowdown follows a period of rapid expansion in the education loan sector, which recorded double-digit growth since 2018. This growth was largely driven by India’s aspirational middle class and the English-speaking student population eager to pursue education abroad.
### Regional Slowdown and Disparities
The slowdown in demand is particularly prominent in India’s western and northern regions. Reserve Bank of India (RBI) data indicates that education loan outstanding in these areas grew at a slower pace between 2016 and 2024.
Meanwhile, the southern region continues to be the largest contributor to outstanding education loans, with Tamil Nadu leading the way. Even so, lenders such as Credila Financial Services and Avanse Financial Services have started experiencing slower growth in this segment.
### Challenges for Non-Banking Financial Companies (NBFCs)
Education loans have been a major growth driver for education-focused NBFCs like Credila and Avanse. Both companies have built robust businesses around financing overseas studies, especially master’s programs in STEM and management fields.
In FY25, Credila disbursed over ₹15,000 crore to more than six lakh students, while Avanse has aggressively expanded its market presence in Tier 2 and Tier 3 cities to tap into the burgeoning aspirational demand.
Together, these NBFCs have increased their share of the education loan market dramatically—from 11% in 2016 to nearly 45% by 2024. However, with the current market slowdown triggered by US policy changes, these lenders now face sharper risks and challenges in sustaining their growth trajectory.
—
The hike in H-1B visa fees underscores the vulnerability of India’s overseas education financing segment to international policy shifts and highlights the need for diversification and adaptation in this evolving market landscape.
https://www.newsbytesapp.com/news/business/us-visa-fee-hike-hits-india-s-education-loan-market/story
