Naveen Kumar (name changed on request), a 20-year-old resident of Balasore district in Odisha, wanted to do master’s in forensic science.

Unable to make it to the National Forensic Sciences University, India’s premiere forensic college, in Gandhinagar (Gujarat), he decided to look for opportunities overseas.

Short of money, his father, a retired government officer, had to place his pension certificate as collateral for Kumar’s education loan from a State-run bank.

“I would have obviously preferred to study in India, but the opportunities in forensics are limited here. Even as a profession, forensic science is a nascent field,” Kumar says.

So, he took admission in a college in Sweden.

Like Kumar, an increasing number of young men and women from rural and small-town India, some of them from low-income groups, are looking to study abroad, say overseas educational consultancies.

“Four years ago, 30 per cent of the students used to be from low-income groups or small towns. Now, it’s 60 per cent,” says Sameer Yadav, founding director of Gujarat-based No Borders Consultancy.

“For loans, many of these students place their homes or farmlands as collateral.”

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He adds that the students, who often have limited exposure, are also concerned about being cheated.

A lot of them do get cheated and charged a high fee by the consultancies and the agents, whom they often pay in cash, adds Adarsh Khandelwal, CEO of education consultancy Collegify.

In March, nearly 700 students in Canada faced deportation after their college admission letters, based on which they had entered the country to study, were found to be fake.

The letters had allegedly been forged by their agent, who had charged the students lakhs of rupees to facilitate their college admission.

The number of Indian students going abroad for higher studies touched a six-year high in 2022, the education ministry told Parliament in February.

The number rose from 450,000 in 2017 to 520,000 in 2018 and went up to 586,000 in 2019.

Though it fell to 260,000 in 2020 due to the pandemic, it nearly doubled in 2021 with close to 440,000 students going abroad. In 2022, the figure hit 750,000.

“The salary in India for certain professions is quite low and the competition stiff,” says Himanshu Sekhar Das, chief managing officer, Bank of India, Baripada in the Mayurbhanj district of Odisha.

“In a sector like IT, the career prospects are better abroad. Also, with the continued absence of Chinese students due to the strict Covid containment measures, Indian students are seeing this as an ideal time to go abroad.”

According to a 2021 Redseer report, India’s overseas education market is estimated to more than double to $80 billion by 2024.

The report cited the rising aspirations of people from smaller cities and rural areas as a potential reason for this.

“Post the pandemic, the demand from big cities like Delhi, Mumbai, Hyderabad and Bengaluru has been stagnant — it’s even dipping,” says Khandelwal.

“But the numbers are rising from places like Sitapur (Uttar Pradesh) or Dhanbad and Jamshedpur (Jharkhand).”

Global uncertainties, though, are causing worry.

A student from Rajasthan’s Dausa district, who does not wish to be named, says he drew a loan of nearly Rs 20 lakh (Rs 2 million) from a bank to study abroad.

He and his father were planning to repay the loan, but then his father lost his job during the Covid-induced lockdown.

Since his family wasn’t well off, they had put his uncle’s land as collateral for the loan.

He’s worried how the global uncertainty will play out for him.

“I am working part-time in Canada. I have two more years to complete my degree,” he says.

“Earlier, my father was paying back a bulk of the loan amount, while I contributed less. That was before he lost his job.”

His father now works as a security guard in Jaipur, but the salary is less than half of what it used to be.

“We’ve had to ask our extended family for help and it’s getting increasingly difficult,” he says.

Also, increasing defaults in student loans are making banks more hesitant in giving out loans.

According to a paper published by the Reserve Bank of India in June 2022, outstanding education loans of all banks stood at Rs 79,056 crore (Rs 790.56 billion) at the end of March 2020 and at Rs 78,823 crore as of March 2021.

These had increased to Rs 82,723 crore (Rs 827.23 billion) as of March 25, 2022.

“It is time the policies were amended. Banks give loans but students don’t end up getting good jobs with decent salaries,” says Rohit Sethi, director, ESS Global, a Delhi-based educational consultancy firm.

“The industry also needs to be in sync with the universities and the students with a minimum assured salary. That would help students to repay loans in a timely manner and the default rate would go down,” he adds.

It was reported last year that the Centre is actively considering roping in regional rural banks under the Credit Guarantee Fund Scheme for Education Loans (CGFSEL) in an attempt to push banks to disburse more student loans.

The CGFSEL covers default in education loans of up to Rs 750,000 without any collateral security and third-party guarantee.