Indian students pull back on US plans as education loan firms see sharp drop

Key Takeaways

• Indian student loan enquiries for US study dropped 50% in early 2025 amid stricter F-1 visa rules.
• F-1 visa approvals for Indian students fell 38% from 2023 to 2024 due to tougher immigration policies.
• Education loan firms now demand stronger collateral and prioritize elite universities for loan approval.

For years, Indian students have made up the largest group of international students in the United States 🇺🇸. More than 330,000 were enrolled in American universities during the 2023-24 academic year, with many families seeing a US degree as a ticket to better jobs and brighter futures. But things are changing quickly in early 2025. A big drop—about 50%—in Indian students asking about loans for US study is shaking the education finance sector in India 🇮🇳.

Education loan firms, who depend on students heading abroad, are sounding the alarm. These companies say that only half as many students are now coming to them with questions or requests about borrowing money to study in the United States 🇺🇸. As reported by VisaVerge.com, this sudden change is deeply tied to new immigration policies, growing money worries, and tougher approval rules from lenders.

Let’s break down what’s causing these big shifts, who’s affected, and how Indian students and education loan firms are now making new plans.

Tougher US Immigration Policies Under President Trump

Since 2025, many Indian students have developed real concerns about applying to US colleges, mainly due to changes in immigration rules. President Trump’s return to office saw tighter rules for the F-1 visa—the main student visa for people studying full-time in the United States 🇺🇸.

Banks and students alike are reacting to these trends:

• F-1 visa rejections are rising: From 2023 to 2024, there was a 38% drop in the number of F-1 visas granted to Indian students.
• Shorter visa terms are possible: Some students fear they’ll get only shorter visas. This means less time to study, find jobs, or adjust to US life.
• OPT (Optional Practical Training) at risk: US officials discuss limiting, or even getting rid of, post-study work programs. These rules let students work in the United States 🇺🇸 for up to three years after getting a STEM (Science, Technology, Engineering, Math) degree. Many Indian students count on this time to get valuable job experience or repay their loans.

These changes have made the process much less predictable. Not only is it now harder to get the F-1 visa, but the promise of working—at least for a while—after finishing a degree is less certain too.

You can find more about the F-1 visa process and current rules from the US Department of State.

Money Pressures and Tighter Loan Approvals

Costs for studying in the United States 🇺🇸 are also soaring. Tuition, housing, and other expenses can add up quickly. As of 2025, total yearly costs range between $35,000 and $85,000 for many students—a sum well beyond what most middle-class families in India 🇮🇳 have saved.

This is why education loan firms became so important. They could help cover nearly all expenses, letting students chase their US dreams. But now, banks and non-bank lenders are becoming far more careful about who gets a loan:

• They are asking for stronger financial backgrounds. This means students or their families may need to offer buildings, houses, or other property (known as collateral) to guarantee the loan.
• Lenders may prefer students admitted to “elite” colleges or universities. Getting into a top school is now even more important.
• Loan amounts are being cut down in many cases. Even if a student qualifies, they may only get part of what they asked for.
• Repayment is under the microscope. With the job market in the US 🇺🇸 slowing and fears of a recession, firms want to make sure students can pay the money back. Many are now worried that students who can’t stay and work after graduation may have trouble making loan payments.

All these pressures make it harder—sometimes impossible—for regular students to secure the support they need.

Shifting Habits: Students Rethink Their Plans

For generations, studying in the United States 🇺🇸 was the dream for ambitious Indian students. That dream now faces big roadblocks.

• Loan enquiries for US colleges have dropped by half. Companies like InCred Finance are seeing a 50% reduction compared to last year.
• Students are now “hedging.” They ask lenders and counselors about backup plans: what if I can’t get a US visa? What if I need to transfer credits to another country?
• Interest in Canada 🇨🇦 and the UK 🇬🇧 is rising. These countries allow more stable post-study work options. Their visa policies aren’t changing sharply every year, and the path to work after graduation is clearer.
• Banks say students are “cautious.” While the desire to study abroad is not completely gone, the excitement has cooled. Most students (and their families) now do deep research before applying.

These shifts mean a once-steady business pipeline for education loan firms is now unpredictable. At the same time, the dreams of many middle-class families are put on hold, or suddenly seem out of reach.

The Education Loan Firms’ Perspective

The education loan sector in India 🇮🇳 is deeply affected. Here’s how their situation compares now to just a year ago:

Education loan firms are now preparing for more stressed borrowers if the job market does not improve. If more students have to return to India 🇮🇳 without jobs in the United States 🇺🇸, many may struggle to pay back their loans. To address this possible problem, lenders are working on new rules for restructuring loans or easing payment timelines. They want to prevent students—and their families—from falling into heavy debt traps due to factors outside their control.

Some in the industry say this situation could get worse if anti-immigration feelings grow, or if US work programs (like OPT) are further limited or cut. This tension is causing real panic within the sector, and there’s daily talk about what the future might look like.

Why F-1 Visa Policies Matter So Much

The F-1 visa is central to these changes. It is the standard permit for international students enrolling full time in American schools and universities.

• If a student wants to get an F-1 visa, they usually must show enough money to pay for their first year of studies.
• They must have an admission letter from a US-accredited school.
• They need to convince US consular officials they intend to return home after their education.

But under new policies, Indian students now face:

• More interviews or documentation checks before visas are approved
• Higher chances of rejection, especially for those with less money or from lower-ranked schools
• Unclear future regarding work stays, particularly with the Optional Practical Training program

All these hurdles make the US 🇺🇸 a riskier bet. The facts and step-by-step rules about the F-1 visa are available directly from the US Department of State’s website.

Changing Tides: The Search for Alternatives

Faced with unpredictability, Indian students are carefully weighing their next steps. Many are still interested in a US education, but are equally interested in safety nets and wider options. This means:

• Many students submit applications to universities in Canada 🇨🇦 and the UK 🇬🇧 at the same time they apply in the United States 🇺🇸
• Students and families ask for information about switching schools or transferring credits if plans change suddenly
• Some delay their study abroad plans entirely, hoping that conditions will improve in the next one or two years
• Counsellors report a jump in “contingency planning”—students want to talk through every possible outcome before making big money commitments

Education loan firms are responding by sharing more information and being extra careful in helping applicants. They must balance offering support with protecting themselves from rising risks if many students cannot pay their loans back.

Numbers That Tell the Story

• More than 330,000 Indian students studied in the United States 🇺🇸 in 2023-24, the largest group from any country
• Enquiries for US-bound education loans have fallen by about 50% since President Trump began new stricter rules in 2025
• F-1 visa approvals for Indian students dropped by 38% between 2023 and 2024
• The yearly cost of studying in the United States 🇺🇸 can reach as much as $85,000, making access to education loans essential for most Indian students

These numbers paint a clear picture: the entire cycle of US-bound education from India 🇮🇳 is now under serious pressure.

Possible Long-term Impact

If these trends continue, experts warn of several big changes:

• New Destinations: Canada 🇨🇦 and the UK 🇬🇧 could become the main choices for Indian students, especially if work and immigration rules stay friendlier.
• Wider Gaps in Access: Only the wealthiest or most “elite” students may be able to afford the United States 🇺🇸, or gain approval from both consular officers and banks.
• Pressure on Indian Colleges: If fewer people go overseas, competition for the best local programs in India 🇮🇳 could increase.
• Business Slowdown for Loan Firms: A shrinking US-bound student pool means lenders need to find other ways to keep their businesses growing, or face layoffs and losses.

There is also the chance—if conditions improve and friendlier visa rules return—that interest in the United States 🇺🇸 could bounce back quickly. Until that happens, most lenders and families are taking a wait-and-see approach.

Looking Ahead: Choices and Advice

For Indian students planning their future, the current climate calls for extra planning, careful budgeting, and an open mind about destination countries. For families, it’s more important than ever to:

• Talk to bank officials and education loan firms before committing to big debts
• Apply only to strong or “top ranked” universities, as banks now list them as lower-risk
• Build backup plans for scholarships, work, and alternate countries
• Keep up with the latest policy news or visa rules before final decisions

Education loan companies, meanwhile, are keeping a close watch on both US developments and the changing flow of student interest. Many are updating their own requirements daily, responding to both government news and student worries.

In a time when money, job prospects, and immigration rules are so closely tied, both Indian students and the firms that support them must act with care. The US 🇺🇸 remains a strong—but riskier—option. For now, many students and education loan firms are simply hoping for more stable ground in the near future.

For the most reliable updates on visas, study abroad options, and what Indian students should know next, refer to trusted sources like the Department of State’s student visa portal, as well as industry news from VisaVerge.com and other leading platforms.

By staying informed and being ready to adjust, students and lenders can chart their path through these changing times—whatever comes next.

Learn Today

F-1 Visa → A non-immigrant student visa for studying full-time at accredited US colleges or universities; subject to strict eligibility rules.
Optional Practical Training (OPT) → A program allowing F-1 visa holders to work in the US post-graduation, especially important for STEM graduates.
Collateral → Assets—such as property or buildings—required by lenders to secure education loans and reduce their financial risk.
Education Loan Firms → Companies in India that provide specialized credit for students seeking to study at international institutions.
Visa Rejection Rate → The percentage of visa applications denied by authorities, which affects students’ chances of studying abroad.

This Article in a Nutshell

Indian students have long sought US degrees, but harsh 2025 visa policies sparked a 50% drop in loan enquiries. Lenders now focus on fewer, elite applicants. Rising costs and unpredictable job options leave families reconsidering study abroad. Many shift to Canada or the UK, seeking stability and clearer prospects.
— By VisaVerge.com

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• Todd Rokita Shares Views on Education Policy and State Immigration Bill
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• Education Department Unveils New “End DEI” Online Portal