For nearly a decade, India has held the title of the world’s largest sender of international students, with more than 1.2 million Indian students enrolled in overseas higher education institutions as of 2025. But a confluence of economic pressures, shifting immigration policies, and dimmed post-graduation job prospects is upending this long-standing trend, forcing hundreds of thousands of aspirational middle-class students to rethink their dreams of studying abroad.
Pragati Priya, a 29-year-old content creator from Jharkhand in eastern India, spent years planning to pursue a master’s degree overseas. This September, she will finally depart for Rome to study global economic affairs, a step she hopes will unlock high-value professional opportunities across Europe. But her excitement for the adventure ahead is tempered by sharp anxiety, sparked by the Indian rupee’s steep, sustained depreciation against major global currencies including the euro.
The plummeting rupee has pushed her required student loan balance far higher than she originally projected, leaving her questioning whether she made the right choice. “It has kept me up at night. I don’t want to burden myself with a student loan that I will never finish repaying,” Priya shared in an interview with the BBC. “I considered dropping my plans, but my parents and sister promised to support me. That’s the only reason I’m able to take this risk.”
Priya’s dilemma is far from unique. It reflects a growing crisis across India’s middle class, where studying abroad has long been viewed as a ticket to upward social and economic mobility. Today, a weakening rupee, bleak post-graduation job outlooks in traditional study destinations like the U.S. and UK, stricter visa rules, and hardened immigration policies have combined to make the cost of an overseas degree far too high for many to bear. Unlike Priya, most aspirants do not have a family safety net to absorb the rising costs, and that shift is already showing up in official enrolment data for the popular September intake at global universities.
Sushil Sukhwani, founder of Edwise International — one of India’s leading student placement firms that sends thousands of Indian students to overseas universities annually — says the slowdown in demand for traditional destinations is unmistakable. “We’ve already seen enrolments to the UK and US fall by 20% over the last two years, and I expect another 10-15% decline from those levels going forward,” he said.
Tougher visa requirements have already driven significant declines: 76% of UK universities reported drops in Indian student enrolment for the 2026 January intake, while U.S. institutions saw a nearly 7% fall in Indian student enrolment between February 2025 and February 2026. The rupee’s decline has only compounded these challenges, for both new applicants and students already studying overseas. Since 2019, the rupee has depreciated between 35% and 47% against the currencies of the world’s top study destinations, including a more than 10% drop against the U.S. dollar in just the last 12 months. “Many students who are already abroad have paid part of their tuition fees, but are now having to refinance loans and arrange additional funding to cover future instalments,” Sukhwani explained.
Beyond rising upfront costs, post-graduation prospects have dimmed dramatically for many Indian students. While a small share of graduates have secured well-paying jobs and built stable careers overseas, climbing into professional roles in trained fields has become increasingly difficult. Sudhanshu Kaushik, founder of the North America Association of Indian Students in Washington, says many graduates now end up working full-time in the gig economy just to make ends meet — a shift that was once only a temporary side gig to fund education. This reality has eroded willingness among Indian families to take on the massive risk of taking on debt for an overseas degree, particularly as the weaker rupee has pushed total costs to record highs.
Even with these headwinds, overall demand for foreign education among Indian students remains strong. What is shifting dramatically is where students are choosing to go. Forecasts from the 2026 Global Student Flows Report predict that Indian student enrolment in the U.S., UK, Canada, and Australia — the “big four” traditional destinations — will decline by an average of 0.5% annually through 2030. At the same time, demand for alternative European destinations has surged.
“Countries such as Germany, Ireland, Italy and several other European destinations are attracting increasing interest from Indian students because of lower tuition costs, favourable post-study work pathways, strong employment prospects and a more attractive overall value proposition,” said Mayank Maheshwari, co-founder and COO of student accommodation platform University Living. Edwise International has already shifted its operational focus to these emerging destinations to match growing student interest, and the cost advantage is a major draw for students like Priya, who chose Italy specifically because its tuition costs are roughly half of what she would have paid in the UK, while the U.S. was entirely out of reach due to longer program lengths and far higher price tags.
For the U.S. and UK, which have built decades of global influence around their world-leading higher education sectors, this trend carries significant long-term risks. India remains one of the largest single sources of international students for both nations, even as enrolment from China has slowed in recent years. Kaushik argues that a perfect storm of overlapping factors — the depreciating rupee, post-pandemic job market weakness, AI disruption to entry-level roles, visa restrictions, and the current U.S. administration’s restrictive immigration policies — has created a lose-lose situation for all parties.
“No one wins,” Kaushik said. “The students suffer, the universities suffer, college towns suffer and the broader economy suffers. For the U.S. especially, this trend risks undermining one of its most successful sources of influence abroad. We are retreating from the gains we made in promoting higher education as one of our most influential and profitable forms of soft power.”