Education loan disbursals in Gujarat declined by 14% during the 2025–26 financial year as fewer students chose to pursue higher education in the United States and Canada amid tighter immigration policies and stricter visa regulations. The trend has been highlighted in the latest report of the State Level Bankers’ Committee (SLBC) Gujarat.
According to the report, banks disbursed Rs 1,786 crore through 22,116 education loan accounts during 2025–26. In comparison, Rs 2,078 crore was disbursed through 22,419 loan accounts in the previous financial year.
While the number of education loan accounts saw only a marginal decline, the total value of loans dropped significantly. This indicates that students, on average, borrowed smaller amounts for their higher education.
Banking sector sources attributed the decline mainly to the sharp fall in the number of students opting for the US and Canada for higher studies. They said uncertainty surrounding immigration policies and visa regulations has prompted many students who had already secured education loans to either defer or cancel their overseas education plans. As a result, several sanctioned loans remained undisbursed, while others were released for lower amounts than originally approved.
Education consultants say the trend marks a major shift compared to three years ago, when the US and Canada dominated overseas education enquiries.
Foreign education consultant Bhavin Thaker said the number of students heading to the US and Canada has fallen by nearly 70% from its peak three years ago. According to him, students are increasingly choosing destinations such as Germany, the UK, Malta, Italy and Finland, where tuition fees are lower and immigration rules are considered more favourable.
The growing preference for these more affordable destinations has also reduced the average size of education loans.
Thaker explained that the overall cost of studying in Germany is around Rs 15 lakh, compared with nearly Rs 25 lakh for a similar programme in the US or Canada. He also noted that many students now finance only the first semester before travelling, further reducing their initial loan requirement.
Consultants also pointed out that the depreciation of the rupee has had little impact on education loan demand this year. Although a weaker rupee has increased the cost of studying abroad, its effect has largely been offset by the growing preference for lower-cost European destinations and the decline in students choosing traditionally expensive countries such as the US and Canada.
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