Funds sent abroad for studies fall to 8-year low

MUMBAI: India’s outward remittances for overseas education fell 24% year-on-year to about $0.32billion in Aug 2025 from $0.42billion in Aug 2024. The figure was the lowest for Aug since 2017, a month that typically sees higher remittances at the start of the academic season in US.

“The 24% fall in education remittances highlights how closely India’s foreign exchange outflows are tied to a complex mix of global policy, economic, and behavioural shifts shaping India’s outward forex flows,” said Pavan Kavad, MD of currency exchange firm Prithvi Exchange (India) Ltd.

Education-related spending, one of the biggest components under the Liberalised Remittance Scheme after travel, is losing momentum, even accounting for pocket money wired under the “maintenance of close relatives” category.

Remittances see steady decline after peaking at $2.3bn in 2021

From $787.8million in 2017, remittances surged to $1.95bn in 2019, before the pandemic lowered it to $1.12bn in 2020. The post-lockdown rebound of 2021 ($2.37 bn) proved short-lived. Since then, slide has been steady.

“Stricter visa norms in top study destinations such as the US, UK, and Canada have had a direct impact on the timing and volume of education remittances,” Kavad added. “Many students face higher rejection rates or prolonged processing, forcing families to delay or defer payments.”

Education counsellor Karan Gupta said a shift is underway. “Those heading for diploma courses or mid-tier universities abroad are pulling back, because the return on investment no longer stacks up,” he said. Another counsellor, Pratibha Jain, said when “the USA is shutting its doors on our students, they are not going to other countries, rather staying back, right here at home.” She added that India’s own universities are now “offering a range of courses, many at par with the world,” prompting more students to stay back for undergraduate studies and look overseas only for postgraduate programmes.

Gupta, however, pointed out that top performers continue to apply abroad in record numbers. “Admissions have doubled or even tripled in some cases,” he said. “What we’re watching now isn’t just fewer students going overseas — it’s a recalibration of expectations, priorities, and financial decisions among families and institutions alike.”

With annual education costs soaring — CAD 30,000 in Canada, £22,000 in the UK — and a weakening rupee, families are also turning to cheaper alternatives overseas such as Australia and New Zealand, which offer simpler visa rules and lower living costs.

“Many parents have become increasingly cautious,” Kavad said. “They’re opting for partial payments or splitting remittances to manage currency volatility and uncertainties in foreign admission timelines. The moderation in education-related outflows isn’t just about fewer students going abroad — it reflects a more cautious and strategic approach to overseas spending.”

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