Stricter Visa Rules In US, UK And Canada To Boost Indian Higher Institutions: ICRA

Image Credit: Freepik

New Delhi: The Tightening of student visa norms in the USA, the UK, and Canada is likely to benefit Indian higher education institutions in the near to medium term, according to rating agency ICRA. ICRA’s analysis suggests that the credit profiles of these institutions, especially those catering to the medical stream, have shown steady improvement in recent years.

ICRA projects the revenue of higher education institutions to grow by 9–11% in FY2026, similar to the growth estimated for FY2025, driven by expanding seat capacities, improving enrolments, and the addition of new courses. With nearly 15–20% of India’s population estimated to be in the 15–24 age group, and with improving literacy rates, the demand for higher education in the country is expected to increase over the next decade.

While the rising cost of higher education has remained a deterrent, improved access to credit (education loans) for students aspiring to pursue higher education — supported by various financial institutions — has been providing significant relief. Additionally, the Government of India’s expenditure on higher education has doubled over the last 10 years. This, coupled with an increase in the number of universities from 642 in AY2011 to approximately 1,189 as of AY2025, has translated into substantial revenue growth for major universities.

Healthy admissions, along with an annual fee hike of around 6–8%, have resulted in a strong compounded annual growth rate (CAGR) of 15% in revenue for these colleges during FY2020–FY2024.

Suprio Banerjee, Vice President & Co-Group Head, Corporate Ratings, ICRA, said, “Beyond the Government of India's thrust on higher education, the recent tightening of student visa norms in the US, the UK, and Canada will also encourage some Indian students who had been targeting international universities to explore domestic options instead. The higher education sector in India is poised for growth owing to continued strong demand, rising disposable incomes, easy access to credit, and enhanced government focus through initiatives like the National Education Policy (NEP) 2020 and increasing private sector participation.”

Banerjee added, “The operating surplus for the entities under study remained healthy at around 30–35% during FY2020–FY2024 and is expected to remain strong — above 30% — in FY2025 and FY2026. Despite intermittent, sizeable capex requirements for capacity expansion, debt coverage metrics are expected to stay robust, driven by on-book liquidity to fund capex and healthy surplus generation, which limits borrowing levels.”

The Gross Enrolment Ratio (GER) for higher education has increased over the years — from 21% in AY2012 to approximately 28% in AY2022. The NEP 2020 aims to boost GER in higher education to 50% by 2035. While this is an ambitious goal, it highlights the sector’s vast untapped growth potential.