Indian students lose Rs 1,700 crore to hidden bank fees in 2024: Report

India Today

a day ago

When an Indian student boards a flight for New York, London, or Melbourne, they aren't travelling alone, not in spirit, and certainly not in sacrifice. Behind every young scholar is a family that has chosen to stretch its limits. They sell land, dip into retirement savings, take education loans, and pool family incomes. It's a quiet revolution carried out in living rooms, not headlines.advertisementBut while their story is familiar, a new cost has entered the picture, one not found in any college brochure or visa checklist.In 2024, Indian families collectively lost Rs 1,700 crore, around USD 200 million, not to tuition fees or housing, but to hidden charges from banks.
This figure, drawn from a report by Wise and Redseer Strategy Consultants, represents what was paid in exchange rate markups and banking fees alone. It is a cost invisible to most, but immense in its impact.To grasp the scale, consider this: the amount lost is nearly three times the budget of India's Chandrayaan-3 moon mission.HOW THE NUMBERS ADD UPOver 760,000 Indian students are currently studying abroad. Most rely on their families to send regular remittances to cover living expenses, tuition, and unforeseen costs.The report estimates that Indian households remitted between Rs 85,000 to Rs 93,500 crore (USD 10–11 billion) in 2024 for educational purposes.Over 95% of these funds are sent via traditional banks. The banks, in turn, apply an average 3-3.5% markup on currency exchange.Add processing fees and delays of 2–5 working days, and the impact is hard to ignore.For a family sending Rs 30 lakh a year, this means Rs 60,000-75,000 lost to hidden charges, an amount that could cover several months of living expenses or a semester of coursework.WHAT STUDENTS ARE SAYINGPriyanka Agarwal, an Indian student in the United States, explains it plainly: 'The loan helped. But the forex service I used made all the difference. I didn't know how much we had been losing in earlier transfers until we switched.'Harusha, also in the US, points to the urgency of everyday life: 'My parents used to transfer money through the bank. It would take two to three days. But sometimes, I needed the funds immediately, for rent or emergencies.I switched to instant platforms, and it felt like a burden lifted.'Their stories echo a larger shift. Education-related payments now account for 75% of Wise's volume in India, just three years after the company entered the market.advertisementIts promise: mid-market exchange rates with no hidden fees, 12-hour average delivery time, and transparency in transactions.THE ISSUE OF TRUST AND TRANSPARENCYTaneia Bhardwaj, South Asia Expansion Lead at Wise, put it bluntly: 'Students today move fast. Their payments should, too. Five-day waits and surprise charges aren't just an inconvenience -- they're disruptions to education.'She adds: 'It's not just about efficiency. It's about fairness. When a parent makes sacrifices for a child's education, that money should reach where it's needed -- not disappear in invisible margins.'To address regulatory barriers, Wise also announced its plan to support education-related transactions made through loans, which may qualify for tax exemptions under India's updated TCS (Tax Collected at Source) rules.A BROADER ECONOMIC UNDERTONEIndia's outbound education economy is growing rapidly. In 2024, for the first time, India overtook China as the leading source of international students in the US.Indians now account for over 30-35% of student enrolments in major study destinations. Just ten years ago, this figure stood at 11%.As education transforms into a key pillar of the Indian middle-class aspiration, remittance channels must evolve.The story is no longer just about reaching top universities, it's about reaching there without bleeding dry on the way.advertisementIn the end, this is not just about banking or transfers. It's about trust. It's about making sure that every rupee sent carries the full weight of a family's hope -- not the burden of opaque pricing.As families prepare to double their spending on education by 2030, the cost of financial inefficiency becomes a national concern.One that requires better systems, clearer regulations, and a renewed respect for what these families are trying to build, one tuition payment at a time.The question isn't whether Indian students will continue to pursue global dreams. They will. The question is whether the system will let them do it without losing more than they already give.- EndsMust Watch