Foreign degree loses sheen as students question return on investment

From currency depreciation and rising living costs to visa tightening and doubts over return on investment (RoI), Indian families are rethinking the once-coveted foreign degree. In 2024, 759,064 Indians went abroad for studies, a 15 per cent drop from 892,989 in 2023, according to government data. 

 

The sharpest declines were for Canada, the United Kingdom and the United States, with student numbers falling by 41 per cent, 27 per cent and 13 per cent, respectively. Australia and China also saw lower inflows.

 

Despite this, the US remained the top destination, hosting over 204,000 Indian students, followed by Canada with 137,608. Germany, Bangladesh, Russia and Ireland saw double-digit growth, with Germany up by 49 per cent. France, the Philippines and Uzbekistan also recorded increases. 

 

The overall slowdown and shift in preferred destinations signal a deeper change in student and family priorities. The foreign degree no longer sells itself. This shift is also reflected in the Reserve Bank of India’s Liberalised Remittance Scheme data, which shows that remittances for studies abroad dropped 29 per cent year-on-year in May to $149.8 million.

 

Economic pressures are at the forefront of this. Since early 2021, the rupee has weakened by roughly 17.5 per cent against the dollar. The currency slide has compounded financial strain, particularly when paired with inflationary pressures in major study destinations. 

 

“Absolutely,” said Raushan Tara Jaswal, a study-abroad consultant and assistant professor at O P Jindal Global University, Sonipat, when asked if rupee depreciation and rising costs were affecting decisions. “It’s among the top three concerns right now... Even those who can technically afford it are asking tougher questions: Will my child get a job abroad? Will the degree pay for itself? The emotional dream is now being filtered through a hard economic lens,” added Jaswal, who completed her LLM at the University of Cambridge as a Commonwealth scholar.

 

Living expenses have surged. Rents in Canada for turnover units rose 23.5 per cent in 2024, while the UK saw student accommodation costs rise by over 8 per cent, with the private sector touching nearly 9.4 per cent. The average annual private rent outside London is now Pound 7,632.55, which is about 77 per cent of the UK’s maximum student maintenance loan.

 

Even when students secure jobs after their studies, financial viability remains tenuous. 

 

“If you earn Pound 27,000 to Pound 40,000 a year, which is the starting salary of a recent graduate, you cannot survive in major cities in the UK,” said Adarsh Khandelwal, co-founder and director of Collegify, a Delhi-headquartered overseas education consulting platform. “So people move to suburbs where opportunities are limited. Those who commute get burned out quickly.”

 

Scholarships have not kept pace either. “Even scholarships that are available are fewer than in most countries, especially for foreign students,” Jaswal said.

 

The migration calculus has also shifted. “The global mood has changed,” said Jaswal. “Immigration policies have tightened, job markets are uncertain, and host countries are clearly signalling a recalibration.”

 

Canada, for instance, capped new study permits at 360,000 for 2024, a 35 per cent cut from 2023, and tightened post-study work rights. But the trend is not uniform. “In 2025, they are seeing recovery... but only among good universities that want students with employable and specific high skills,” said Khandelwal.

Australia has introduced a “no further stay” rule on certain visas, raised student visa fees to A$1,600, and reduced the age cap for the Temporary Graduate visa. The US issued 64,008 F-1 visas to Indians in 2024, down 38 per cent from 2023.

 

Khandelwal said Australia’s policy changes stem in part from a housing crisis and domestic backlash against international students taking low-skilled jobs. “At this point, Australia has become so strict that if you cannot show all the funds required for your entire education, your visa will most likely not be approved,” he said.

 

Degree vs employability

 

Beneath the policy shifts lie deeper concerns about the value of foreign education itself. “Certain well-known universities... use their brand to bring in students into courses that do not provide employable skills,” Khandelwal said. The proliferation of such programmes has heightened Indian families’ scepticism about RoI. 

 

Even when students get through the door, mid-level jobs for foreigners are disappearing. “It makes no sense going to the US without top skills or admission into a top university,” Khandelwal added. “Especially since H-1B is going to become even harder.”

 

This marks a sharp reversal from previous decades. “Students from India had a good time from 2000 to 2020 as their aim was not education at the core but migration,” Khandelwal said. “Now, with the change in political circumstances around immigration, that luxury is gone.”

 

Total education loan debt in India has crossed Rs 90,000 crore, growing 15 per cent annually, with defaults at 7 to 8 per cent, according to Bengaluru-based non-banking financial company Varthana, which focuses on education financing. It’s a figure that underscores the growing cost and risk of chasing the foreign degree dream.

 

“Getting loans has become very easy but paying them back — and the consequences of not doing so — is very intimidating,” said Khandelwal. “In my estimate, 75 per cent who take loans to go are not hireable and, hence, cannot pay back sustainably.”

 

This rising default risk is now a deterrent in itself. As Jaswal noted, many families are delaying applications, seeking full scholarships, or switching to countries such as Germany and the Netherlands with better cost-to-outcome ratios.

 

Then there is AI

 

A new layer complicating the picture is artificial intelligence. “AI is an especially important factor,” said Khandelwal. “Indians abroad usually did labour-intensive work such as basic accounting and coding to start off, but now companies have shifted to using AI. That entry point and backup has disappeared.” 

Collegify has responded by curating a list of 75 industry-specific AI tools for applicants. But Khandelwal said competency remains rare. “Unfortunately, 9 out of 10 times when we enquire, people are not competent in domain-specific AI tools.”

 

In the backdrop, Indian higher education is gradually improving. The 2026 QS World Rankings list 54 Indian institutions, making India the fourth most represented country and reflecting a near fivefold rise from 11 in 2015. Eight Indian institutions entered the rankings for the first time, the highest number of new entrants from any country this year. In addition, 48 per cent of India’s ranked universities improved their positions compared to the previous year, and six now feature in the global top 250. 

 

“There’s definitely growing pride,” said Jaswal. “We’re seeing more interdisciplinary programmes, better faculty hiring, and a culture of research slowly gaining ground.” She also pointed to reformist momentum under the National Education Policy.

 

However, this improvement has not fully absorbed demand. “India simply does not have enough good educational institutes to manage the number of students seeking them,” said Khandelwal. “Students who are in the 65 to 80 per cent range often can’t get into top institutions and, hence, go abroad.” 

 

Even so, many are choosing to return. “Even if you go out, you should come back to India to work due to affordability and opportunity,” Khandelwal said. “My own students from the past have done this and think it’s the best option.”

 

Ultimately, the fall in numbers is not a collapse but a correction. “We’ve seen years of exponential growth in outbound student migration,” said Jaswal. “Now that surge is plateauing. Students aren’t just going abroad for the sake of it anymore. They’re comparing value, exit outcomes and even geopolitics. That shift from ‘going abroad at any cost’ to ‘going abroad for the right reasons’ is a healthy correction.”

 

India may not yet be a complete substitute for foreign education. But in a world of cost spikes, stricter borders and uncertain jobs, the foreign degree no longer sells itself. Families are doing the math and for many, the numbers just do not add up. 

 

Georgie Koithara is a Business Standard-Rahul Khullar journalism intern