Charting the new education financing landscape: macro stability, rising costs and the India opportunity

“Despite a challenging macro environment and ongoing geopolitical tensions affecting international mobility, the Indian education loan sector continues to be supported by strong structural demand. India’s large young population (aged 15-29 years), rising urbanisation, and an expanding middle class are expected to sustain economic growth and strengthen the country’s position among the world’s leading economies. Thus, financing penetration remains the primary driver of growth in the overseas education loan market, given the substantial size and untapped potential of the segment. India’s overall education market is projected to grow at a Compound Annual Growth Rate (CAGR) of 11-13% between CY24 to CY29, driven primarily by an increase in higher education demands. The demand is impelled by the aspiration for better quality education, supportive immigration policies, and the pursuit of an improved standard of living. But access to funding remains a barrier for many Indian students, further emphasising the critical need of resolute and reliable education financing solutions to bridge the gap between aspiration and access. These opportunities are facilitating NBFC lenders, which are outpacing banks in the education loan sector, to grow their presence, especially among the largely underserved low and middle-income population. India’s macroeconomic environment has become more supportive for long-term borrowing decisions, with greater stability in both interest rates and inflation. The Reserve Bank of India (RBI) lowered the repo rate by a total of 125 basis points (bps) from 6.5% to 5.25% between February and December 2025 to support growth amid low inflation. As of February 2026, the rate remains unchanged at 5.25%. This reflects a calibrated effort to support growth while keeping inflation within the RBI’s target range. The consumer price inflation also declined in April 2025, which helped towards a more stable background for household and borrowers. Together, these shifts suggest supportive environment for long-term financial decisions and a steadier credit cycle in India. This improved macro backdrop sits alongside a broader increase of India’s formal financial system, with the RBI’s Financial Inclusion Index improving through FY24 reflecting stronger access, usage, and quality across financial services. The regulatory environment has also evolved to support credit flow to the NBFC sector, thus ensuring adequate credit transmission to underserved segments of the economy and providing a more supportive backdrop for the sector. In CY24, the education market in India (both overseas and domestic) was projected to grow at 11-13% CAGR in value. Newer academic destinations are becoming more popular among Indian students. In CY24, around 26% of international students in the leading education hubs (including the US, the UK, Australia and Canada) were Indians. With rising education costs and income disparity with Indian households, accessible financing options are becoming increasingly critical for students pursuing overseas education With rising education costs and income disparity with Indian households, accessible financing options are becoming increasingly critical for students pursuing overseas education. On the other hand, India’s gross enrolment ratio stands significantly lower than developed markets. This disparity reflects substantial unutilised potential in the higher education landscape. There are several factors contributing to this such as limited access to quality institutions, financial constraints, and socioeconomic factors. As the domestic education market continues to grow, there is an increasing need for education financing, especially within higher education. While government initiatives and an increase in the number of institutions contribute to greater access, the cost of quality education remains a barrier for many. Education financing is steadily moving to the centre of India’s growth story, as more students seek pathways to quality learning and long-term upward mobility. The need ahead is not only for greater capital, but for more thoughtful, specialised, and dependable financing frameworks that can keep pace with the realities of modern education. About the author: Hitesh Parashar is chief business officer at Credila. He holds a bachelor’s degree in engineering from Bhavnagar University, Gujarat and passed the examinations in relation to the post-graduate diploma in business management conducted by Institute of Management Technology, Ghaziabad. He is involved in the strategic and business planning and overseeing the day-to-day sales and distribution for the company. Prior to joining the company, he was associated with Fullerton India Credit Company Limited, ICICI Bank Limited, General Electric Countrywide Consumer Financial Services Limited, and Hindustan Petroleum Corporation Limited. He has over 20 years of experience in the field of sales, marketing, distribution, and product management. The post Charting the new education financing landscape: macro stability, rising costs and the India opportunity appeared first on The PIE News .

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