A more than 10% slide in the rupee against the US dollar over the past 12 months has left Indian students studying overseas scrambling for additional funds, as loans sanctioned in India are falling short of tuition and living expenses payable in foreign currency.
The funding gap has driven a nearly threefold jump in demand for top-up education loans from Indian lenders among students enrolled at US universities, industry executives told ET. Students are seeking top-ups of Rs 1-6 lakh, leading to enhanced sanctions, fresh documentation, power-of-attorney processes and disbursement delays, they said.
Mumbai-based entrepreneur Sunetra Banerjee, whose daughter is studying at a design university in the US, said she and her husband have paid at least Rs 7-8 lakh more than their initial estimates in the first year alone and are apprehensive about further cost escalation.
“Everything costs more…the course fees, living expenses, even the pocket money,” she said. “Travel costs have also jumped big time... A round-trip ticket that cost around Rs 96,000 a year ago, is now close to Rs 1.6 lakh.”
At the time of the initial loan disbursement, the rupee was trading at Rs 85 to the dollar. It is now at around Rs 95, Banerjee said, noting how quickly financial calculations can go awry.
Her daughter has now applied to her college for an additional scholarship. If that does not come through, Banerjee and her husband will have to either consider a top-up loan or liquidate some investments.
Banks and education-focused non-banking finance companies (NBFCs) in India sanction loans in rupees, while students pay university fees and living expenses in dollars, pounds or euros.
Mahesh Avasare, product lead at student lending platform MPower Financing, said the frequency of top-up loans for rupee borrowers has increased almost threefold in the past one year.
According to data from the Reserve Bank of India, around $450 million in outward remittances were made by Indians to fund overseas education programmes, including university fees and living expenses such as hostel costs, in March 2026. The RBI has not published comparable data for previous months.
