In a surprising development in the study abroad space, there has been a significant fall in Indian outward remittances for education. The funds transferred by Indian families for the purpose of studying abroad declined to USD 0.32 billion in August 2025, a decrease of about 23.8% on an annual basis, according to the Reserve Bank of India’s (RBI) bulletin dated August 2025. The remittance value of August is the lowest in the last 8 years and shows an alarming change in the pattern of student mobility and International education trends.
Key Data Overview
According to the RBI’s LRS data, total outward remittances — travel and education included — stood at $2.64 billion in August 2025, down 17.7 per cent over the corresponding period last year. Remittances for travel, which account for the majority of LRS transactions, dipped by 19 per cent. These numbers indicate a more sweeping slowdown in global spending on education and travel, one that signals changing destinations as well as financial calculus for Indian students and their families.
Source: RBI Monthly Bulletin, August 2025
Reasons Behind the Decline
This decline owes to several reasons. Most immediately is the tightening of U.S. immigration policy, which is long Indian students’ No. 1 destination. Talks of visa restrictions and caps on student population have led to many families looking at other destinations for education. Europe, Australia, and the Middle East are becoming popular alternatives, with cheaper fees and more relaxed options for post-study work.
Further, new economic calculations are affecting the decisions. The cost of obtaining a U.S. degree in the current context of volatile currency exchange rates is prompting families to spread their education investments across regions offering cheaper, quality education.
Industry Insights
Observers of the industry have seen this shifting trend. Rajesh Dasari, CEO of the Texas Review, notes that students are now factoring a cost-benefit analysis along with reputation. “We are observing a palpable trend in favor of destinations which offer a combination of quality education and affordability. There’s been growing interest in places like Australia and Germany — they have great academic programs but without the sky-high costs in the U.S.,” he says.
Educational consultants highlight that this trend is not just about finances but also lifestyle and career prospects. Many students prefer countries that allow them to work part-time while studying or provide easier pathways to permanent residency post-graduation. This has led to a redistribution of student interest and, consequently, outward remittances.
Impact on Students and the Economy
In the short run, it may also relieve some pressure on India’s current account deficit, as less money is being spent on educational purposes. However, if the current trend continues in the long run, the decrease in student migration might impact future NRI inflows. Indian graduates going overseas have historically been a significant source of remittances back to India and an essential component of the country’s foreign exchange earnings.