NBFCs' education loan AUM growth to halve amid US headwinds
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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