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Time of India
10-07-2025
- Business
- Time of India
Education loan book growth to halve amid US visa curbs
Mumbai: Crisil has forecast that growth in the education loan book of non-banking finance companies (NBFCs) will slow to half of last year's pace due to tightening immigration policies in the United States that are discouraging Indian students from pursuing higher education abroad. 'Policy uncertainties in the US, combined with measures including reduced visa appointments and the proposed elimination of Optional Practical Training norms have culled newer loan originations. This has led to around 30% decline in total disbursements to that geography last fiscal,' said Malvika Bhotika, Director at Crisil Ratings. According to the ratings agency, education loans had been the fastest-growing asset class for NBFCs in recent years, with assets under management (AUM) rising by over 50% annually. However, Crisil expects this growth to moderate to around 25% in the current fiscal, down from 48% last year and 77% the year before. The AUM is projected to reach ₹80,000 crore by March 2026, up from ₹64,000 crore in FY25. The slowdown has been attributed to a sharp decline in loan disbursements to the US — traditionally the largest destination for Indian students — as the country reduces visa appointments and considers scrapping the Optional Practical Training (OPT) programme for international students. by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like 5-year-old girl needs her second heart surgery! Donate For Health Donate Now Undo Disbursements to Canada, the second-largest market, also declined due to stricter student visa rules, including higher financial requirements and a cap on permits. As a result, overall education loan disbursements rose just 8% in FY25, a sharp fall from the 50% growth seen in FY24. To counter the US-led slowdown, NBFCs are now diversifying into alternative geographies such as the UK, Germany, Ireland and other smaller nations. Disbursements to these destinations have doubled, with their combined share in total education loan disbursals rising from 25% in FY24 to nearly 50% in FY25. However, this diversification is unlikely to fully offset the drop in US-bound disbursals. The US still accounted for 50% of total education loan portfolios as of March 2025, down from 53% a year earlier, and this share is expected to decline further in the coming years. NBFCs are also exploring new product adjacencies including domestic student loans, school funding, and loans for skill development and coaching. While these segments involve lower ticket sizes and are unlikely to materially impact AUM, they may offer portfolio stability during global disruptions. Asset quality in the sector remains strong for now, with gross non-performing assets (NPAs) at 0.1% as of March 31, 2025. Even after adjusting for the principal moratorium — which covers around 85% of the loan book — gross NPAs stood at ~0.7%. 'Despite the global developments, NBFCs have maintained healthy asset quality so far,' said Sonica Gupta, Associate Director at Crisil Ratings. 'However, high growth in the past few years and estimated ~15% of the portfolio coming out of contractual moratorium this fiscal pose some asset quality risks.' The report emphasizes that NBFCs' ability to scale newer segments while maintaining quality, and to adapt to changing student preferences and international policies, will be critical for sustaining growth in the education loan segment. The analysis is based on NBFCs rated by Crisil, which represent over 90% of the industry's total AUM. Stay informed with the latest business news, updates on bank holidays and public holidays . AI Masterclass for Students. Upskill Young Ones Today!– Join Now
India Gazette
09-07-2025
- Business
- India Gazette
For NBFCs, education loan AUM growth to halve amid US headwinds: Crisil
New Delhi [India], July 9 (ANI): For non-banking finance companies (NBFCs), education loans have been the fastest-growing asset class, clocking over 50 per cent growth in the assets under management (AUM) over the past few years. According to Crisil Ratings, that pace is set to halve this fiscal as disbursements for pursuing educational courses in the US decelerate following a raft of policy changes there. To mitigate, NBFCs are diversifying into new geographies and product adjacencies. While non-performing assets (NPAs) have remained stable so far, asset quality will be monitorable given the global uncertainties and a large proportion of AUM (85 per cent) remaining under contractual principal moratorium. The education loan AUM of NBFCs grew rapidly by 48 per cent to Rs 64,000 crore last fiscal. That followed an even faster 77 per cent growth in fiscal 2024, according to Crisil Ratings. This fiscal, growth is seen moderating to 25 per cent with AUM reaching Rs 80,000 crore, the rating agency added. Malvika Bhotika, Director, Crisil Ratings, 'Policy uncertainties in the US, combined with measures including reduced visa appointments and the proposed elimination of Optional Practical Training norms, have culled newer loan originations. This has led to a 30 per cent decline in total disbursements to that geography last fiscal.' 'Disbursements linked to even Canada, the second-largest market, fell as student visa rules turned stricter, including increased financial requirements via proof of available funds, and cap on permits,' Bhotika added. Consequently, overall education loan disbursements were up only 8 per cent in fiscal 2025, compared with 50 per cent in fiscal 2024. To offset these business headwinds, NBFCs have sharpened focus on other geographies, asserted Crisil Ratings. Disbursements linked to courses in the UK, Germany, Ireland and smaller countries have doubled in the past fiscal as students opted for alternative destinations, it added. The share of such geographies in total disbursements rose to almost 50 per cent in fiscal 2025 from 25 per cent a year ago. But, according to Crisil Ratings, this will not fully offset the decline in US-linked disbursements. Notably, the share of the US in the overall education loan portfolio has already come down to 50 per cent as on March 31, 2025, from a peak of 53 per cent as seen on March 31, 2024. It is expected to go down further over the next few years as lenders gravitate towards other geographies. Faced with the crisis, NBFCs are also looking at domestic student loans and adjacencies such as school funding, loans for skill development, certification and coaching, the rating agency asserted. 'Given the lower ticket sizes of such loans, their share in the overall portfolio is unlikely to be material, but they may lend some stability in times of global uncertainties,' it supplemented. (ANI)
Time of India
09-07-2025
- Business
- Time of India
NBFCs' education loan growth may slow sharply in FY26 amid US, Canada policy shifts
NBFC's education loan growth is projected to slow significantly due to policy changes in the US and Canada, impacting disbursements. While US loan share decreases, other countries like the UK and Germany are gaining traction. Despite global shifts, NBFCs maintain strong asset quality, exploring domestic loans and skill development funding. Tired of too many ads? Remove Ads Tired of too many ads? Remove Ads Growth in the education loan book of non-banking finance companies is expected to halve in the current financial year because of policy uncertainty in key markets like the US and stricter student visa rules in Canada. CRISIL Ratings estimated education loan assets under management of NBCFs to grow 25% to around Rs80,000 crore in FY26. This compares to a growth of 48% in the previous fiscal and 77% in terms of loan disbursement, FY25 saw a growth of 8% compared to 50% growth a year ago.'Policy uncertainties in the US, combined with measures including reduced visa appointments and the proposed elimination of Optional Practical Trainingnorms have culled newer loan originations. This has led to a ~30% decline in total disbursements to that geography last fiscal,' said Malvika Bhotika, Director, Crisil linked to even Canada, the second-largest market, fell as student visa rules became stricter, including increased financial requirements via proof of available funds, and cap on permits, she rating agency said that the share of US in overall education loan portfolio has come down to 50% as on March 31, 2025, from a peak of 53% a year share of US is expected to go down further over next few years as lenders gravitate towards other geographies. Meanwhile, education loan disbursements linked to courses in the UK, Germany, Ireland and smaller countries have increased to almost 50% in FY25 from 25% a year ago as students opted for alternative destinations. Still, this will not fully offset the decline in US-linked disbursements, it the same time, NBFCs are also looking at domestic student loans and adjacencies such as school funding, loans for skill development, certification and coaching, CRISIL the global developments, NBFCs have maintained healthy asset quality so far. Gross NPAs stood low at 0.1% as on March 31, 2025. And even after adjusting for the moratorium, gross NPAs were well under control at ~0.7%, the rating agency added.
New Indian Express
09-07-2025
- Business
- New Indian Express
NBFCs' education loan AUM growth to halve amid US headwinds
CHENNAI: For non-banking finance companies (NBFCs), education loans have emerged as the fastest-growing asset class, with assets under management (AUM) expanding by over 50% in recent years. However, that growth rate is expected to halve this fiscal, as disbursements for educational courses in the US slow following a raft of policy changes, according to a latest analysis by rating agency Crisil Ratings. The US has introduced sweeping visa and policy reforms, including the suspension and subsequent resumption of visa processing under tighter social-media scrutiny—especially targeting certain countries and academic fields. The reforms also propose fixed-term student visas, enforce visa revocations linked to political activism, and have triggered legal challenges and institutional pushback. These developments have heightened enrollment anxiety and financial risks for universities. For students from India and other countries, this has translated into longer waiting periods, additional documentation requirements, potential term limits, and greater uncertainty—particularly for those involved in activism or pursuing sensitive academic disciplines. To mitigate the potential decline in business, NBFCs are diversifying into new geographies and adjacent product segments. While non-performing assets (NPAs) in the NBFC sector have remained stable so far, asset quality remains a monitorable factor given global uncertainties and the significant portion of AUM still under contractual principal moratorium. In fiscal 2025, the education loan AUM of NBFCs grew a robust 48% to ₹64,000 crore, following an even sharper 77% growth in fiscal 2024. However, growth is expected to moderate to around 25% this fiscal, with AUM reaching approximately ₹80,000 crore, according to CRISIL Ratings. 'Policy uncertainties in the US, combined with measures such as reduced visa appointments and the proposed elimination of Optional Practical Training norms, have curbed new loan originations. This led to a ~30% decline in total disbursements to the US last fiscal,' says Malvika Bhotika, Director, Crisil Ratings.
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Business Standard
09-07-2025
- Business
- Business Standard
Education loan growth at NBFCs to slow to 25% in FY26 on US visa curbs
The pace of growth in the education loan portfolio of non-banking finance companies (NBFCs) is likely to moderate sharply to 25 per cent in the ongoing financial year 2026 (FY26), against the backdrop of deceleration in disbursements for studies in the United States due to a raft of policy changes there, Crisil said. The rating agency, in a statement on Wednesday, said the education loan book of finance companies in India has been the fastest-growing asset class, clocking about 50 per cent and above year-on-year (Y-o-Y) growth over the past few years. The education loan assets under management (AUM) of NBFCs grew a rapid 48 per cent to ₹64,000 crore last financial year. That followed an even faster 77 per cent growth in financial year 2024. But growth in the ongoing financial year is seen moderating to about 25 per cent with AUM reaching ₹80,000 crore. As a step to mitigate adverse effects of US markets, NBFCs are diversifying into new geographies and product adjacencies. While non-performing assets (NPAs) have remained stable so far, asset quality will be monitorable given the global uncertainties and a large proportion of AUM (~85 per cent) remaining under contractual principal moratorium, rating agency added. Malvika Bhotika, director, Crisil Ratings, 'Policy uncertainties in the US, combined with measures including reduced visa appointments and the proposed elimination of Optional Practical Training norms have culled newer loan originations. This has led to a 30 per cent decline in total disbursements to that geography last fiscal.' The disbursements linked to even Canada, the second-largest market, fell as student visa rules became stricter, including increased financial requirements via proof of available funds, and cap on permits. Consequently, overall education loan disbursements were up only 8 per cent in the financial year 2025, compared with 50 per cent in the financial year 2024.' NBFCs have sharpened focus on other geographies. Disbursements linked to courses in the UK, Germany, Ireland and smaller countries have doubled in the past financial year as students opted for alternative destinations. The share of such geographies in total disbursements rose to almost 50 per cent in FY25 from 25 per cent a year ago. But this will not fully offset the decline in US-linked disbursements. Notably, the share of US in overall education loan portfolio has already come down to 50 per cent as on March 31, 2025, from a peak of 53 per cent as seen on March 31, 2024, and is expected to go down further over next few years as lenders gravitate towards other geographies. NBFCs are also looking at domestic student loans and adjacencies such as school funding, loans for skill development, certification and coaching, Crisil added.
