Trend in India: Low-income, rural students opt for overseas education

An increasing number of young Indians are opting to pursue their higher education outside the country. According to a Redseer analysis published in 2021, India's international education industry is expected to more than double to $80 billion by 2024. The research identified increased ambitions of residents in smaller towns and rural regions as a possible explanation. More than seven and a half lakh people moved away from the country in search of better educational opportunities. 

A new trend that is emerging in the last few years is that students from tier-2 and tier-3 cities and from middle-low income groups are also opting to study abroad. CEO of No Borders consultancy told Business Standard, "Four years ago, 30% of the students used to be from low-income groups or small towns. Now, it's 60%". he further said, "For loans, many of these students place their homes or farmlands as collateral".

Looking for Greener Pastures

In the previous six years, 2022 had the largest number of students travelling overseas for study. According to the education ministry, the number increased from 4,50,000 in 2017 to 5,20,000 in 2018, it further escalated to 5,86,000 in 2019.

Due to the global epidemic, the number fell to 2,60,000 in 2020, but nearly doubled in 2021, with nearly 4,40,000 students studying abroad. This figure is expected to reach 7,50,000 by 2022.

Top destinations for Indian students include primarily English-speaking countries like the United States, Canada, Australia, and Middle Eastern countries such as the United Arab Emirates and Saudi Arabia. 

In early 2022, nearly 4 lakh students were enrolled at various institutions in the United States alone, followed by 1.83 lakh students in Canada. Over 1 lakh Indian students also attend colleges in the UAE and Australia. 

A shortage of quality educational institutions is often attributed to students moving away. A lack of quality schools also leads to increased competition, forcing students to seek superior educational opportunities outside of the country.

Professional prospects in a variety of areas are similarly confined, deterring students from pursuing advanced studies in India. Even the talent who has completed their studies at India's best schools is increasingly preferring to work overseas rather than in India, due to comparatively higher salaries abroad.

According to experts, salaries in India for specific occupations are relatively low, and competition is fierce. Career opportunities in an area like IT are greater elsewhere. Furthermore, due to the ongoing absence of Chinese students due to COVID control measures, Indian students perceive this as an ideal opportunity to travel abroad.

Reports also reveal that post-pandemic demand for moving out of the nation is quite low in tier-1 cities. However, demand from smaller cities such as Sitapur in Uttar Pradesh and Dhanbad and Jamshedpur in Jharkhand is constantly increasing. 

Education Loans and Bad Debts

There are numerous cases throughout the country where students took out large loans to study abroad, but due to unforeseen circumstances such as the income earner of the house losing their employment or facing significant pay cuts, or the death of the house's breadwinner, these households are facing several challenges and many of them are unable to repay the loans. As a result, some family lose their acreage, home, or other collateral. During the pandemic, all of these conditions were particularly common.

The growing amount of bad loans is making banks increasingly cautious about offering education loans. In June 2022, the RBI released a report stating that unsettled loans for education from all banks were ₹79,056 crore at the end of March 2020 and ₹78,823 crore in March 2021. This amount increased to ₹82,723 crore by March 25, 2022.

To combat this, it was reported last year that the Central government is proactively contemplating enlisting regional rural banks (RRBs) within the Credit Guarantee Fund Scheme for Education Loans (CGFSEL) in an effort to encourage banks to issue more student loans. Without any collateral security or third-party guarantee, the CGFSEL covers delinquency on education loans of up to ₹7.5 lakh.

Consultancies and Scams

With the trend of moving abroad picking up throughout the country, private consultancy agencies have come up. They offer assistance with the admission process and some also help with the loans. These agencies are helpful for students to navigate the processes of admission to foreign universities for a certain amount of money.

However, some of these agencies run scam centres to con students. Many students with minimal exposure are afraid of being scammed, and some are. Several consulting firms demand significantly higher fees than usual, and many of them do not even do the appropriate documentation. The Canadian government recently deported over 700 students. Their agents reportedly gave them forged university acceptance letters.

Students from smaller cities desire to study at the world's greatest institutions; this is something to be proud of. However, we must acknowledge that many of these students are not returning home. It is concerning that over 2 lakh people have renounced their Indian citizenship. 

This might be due to greater educational possibilities or a more wealthy lifestyle, but it is critical for the country's development that these talented people remain in India, not via coercion but through expanded chances. Policymakers must solve the country's growing brain drain problem by improving educational and professional prospects, or India's growth may soon become stagnant.