There is a 10-15 per cent rise in Indian students going overseas for education during the current session, according to senior officials in the industry.

The increase was due to the improvement in job markets, rise in income generation of people in the country and the easy availability of bank loans, they said.

Applications for such loans usually start pouring in from May-June for courses beginning in August-September. Close to 1,80,000 students go overseas for higher education every year and this number has gone up by about 15 per cent over the last one year, said Mr Naveen Chopra, Founder, The Chopras, which offers consultancy services for overseas education.

Demand for overseas education had witnessed a lull in the last two years due to the poor job markets, the tightening of norms in countries such as the US and the UK and the recent incidents of violence against Indian students in Australia. Though there was no significant decline in the number of students going overseas, there was a shift in the destinations chosen for studies.

“There was a significant reduction (to the extent of 70-80 per cent) in the number of students going to Australia for higher education due to the recent incidents of violence against Indian students. This traffic shifted to other countries such as Canada, Europe and New Zealand,” Mr Chopra pointed out.

Banks have been witnessing a steady rise in demand for loans for overseas education during the current year.

“During the last two years, we saw a dip in sanctions and disbursements of overseas educational loans as there was a fall in demand from students for such loans. However, now things have picked up,” said a senior bank official.

Close to 50 per cent of the overseas education was funded by banks.

Overseas educational loan account for 10-20 per cent of banks' educational loan portfolio in terms of the number of applications received. However, the value of such loans is higher than domestic educational loans. The average ticket size of such loans is Rs 15 lakh and the repayment period stretches between five and seven years, which is the same for domestic loans.

Overseas educational loans account for 16 per cent of SBI's educational loan portfolio, said a senior bank official. SBI's educational loan book grew by 23 per cent at Rs 10,980 crore as on March 31, 2011.

“The growth in loans for overseas education is on a par with loans for studies in India at present and is expected to be better in the coming years. This is because overseas jobs are picking up, and even if students do not find jobs overseas they come back and get employed here as the job situation in the country has improved,” the SBI official said.

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