Why Indian Banks Face Big Potential Losses on their Foreign Education Loans

(Image: courtesy Wikimedia Commons.)Ironically, the reduced work visa and job opportunities in the US and UK for Indians earning foreign degrees is in part due to a sharp increase in their numbers. In 2024, more than 1.3 million Indians were enrolled in foreign universities. This is up twenty-five fold, from about 53,000, in 2000; and up seven-fold, from about 192,000, in 2010. Hence, the intense competition, among college graduates for jobs in India, is also occurring among Indians with degrees in foreign countries.Yet, many Indian students continue to believe that a foreign degree, even a non-STEM one, is the key that will enable them to get a high-paying foreign job. In part, they are influenced by stories about the success of Indians, especially in the US, widely covered by the media in India.Ultimately, the responsibility lies on the parents and the students. They should view borrowing for a foreign degree with a realistic understanding of the risks.A foreign education loan should not be a speculative gamble, like borrowing a large, high interest loan to buy a lottery ticket. This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit www.globalindiantimes.com