**How H-1B Visa Fee Hike Impacts India’s Education Loan Market**
*By Dwaipayan Roy | Sep 20, 2025, 06:48 PM*
The recent hike in H-1B visa application fees by the United States government has sent shockwaves through India’s overseas education loan market. Industry insiders have informed Moneycontrol that demand for such 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 known critic of the H-1B program — a key pathway for international students aiming to enter the American job market.
### Market Shift: No Major Diversion to Other Countries
Despite the decrease in demand, there has been no significant 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 reconsider their plans to study in the US.
This hesitation comes after a period of rapid growth in education loans, which had experienced double-digit expansion since 2018, powered by India’s aspirational middle class and large English-speaking student population.
### Regional Disparities and Market Slowdown
The slowdown in education loan demand is particularly noticeable in India’s western and northern regions. Reserve Bank of India (RBI) data reveals that outstanding education loans in these areas grew at a slower pace between 2016 and 2024.
Meanwhile, the southern region continues to be the largest contributor to education loan portfolios, with Tamil Nadu leading the way. However, the overall growth momentum has already begun to weaken for major lenders such as Credila Financial Services and Avanse Financial Services.
### Challenges for NBFCs Relying on Education Loans
For education-focused non-banking financial companies (NBFCs) like Credila and Avanse, the risks are more pronounced. Both have heavily invested in financing overseas studies, particularly for master’s programs in STEM and management fields.
Credila disbursed over ₹15,000 crore in FY25 to more than six lakh students, while Avanse has aggressively expanded into Tier 2 and Tier 3 cities to tap into aspirational demand.
Together, these NBFCs increased their share of the education loan market from 11% in 2016 to nearly 45% by 2024. The recent market slowdown poses a significant challenge to their growth strategies.
—
The hike in H-1B visa fees and the resulting policy uncertainty cast a shadow over what was once a booming market for overseas education loans in India. As families reassess their options, lenders and financial institutions will need to adapt to the changing landscape of international education financing.
https://www.newsbytesapp.com/news/business/us-visa-fee-hike-hits-india-s-education-loan-market/story
