Visa restrictions curb surge in international student enrollment
Written by Anees Hussain & Nesil Staney
As tightened immigration rules and student visas in lucrative destinations constrict the core business of study abroad platforms, operators like AdmitKard, Leverage Edu, Leap Scholar, and upGrad are aggressively exploring alternative destinations and student markets to survive and thrive in this ever-evolving landscape.
The four leading destinations – the US, UK, Canada, and Australia – have all experienced double-digit declines, with Canada suffering the steepest drop at 41%, followed by the UK at 28%, the US at 13%, and Australia at 12%. In contrast, up-and-coming destinations such as New Zealand, Germany, Russia, Ireland, and France are witnessing strong upticks, with New Zealand experiencing a staggering 354% increase.
The squeeze on traditional student hotspots has hit study loan providers and currency exchange services like GyanDhan and Prithvi Exchange particularly hard. CEO Ankit Mehra of GyanDhan reported that applications in FY24 remained static compared to the previous year, somewhat better than the COVID-19 crisis, which saw zero applications. While the firm recorded Rs 24 crore revenue and Rs 1.4 crore profit in FY24, it is sacrificing short-term profits in FY25 in order to penetrate new markets.
Against this backdrop of uncertainty, platforms are keen to spread their risks and broaden their horizons, focusing on markets like Germany, which has nearly doubled in size, as well as France, Spain, Italy, and the Netherlands, where growth stands between 50-100%. However, despite the promising growth prospects in these nascent markets, Mehra cautioned that they might not be able to replace the scale offered by the US any time soon.
Recognizing the need for geographical and demographic diversification, companies are also focusing on expanding their source markets. Leverage Edu now generates nearly 30% of its revenue from non-Indian students. In addition to the second-largest market, Nigeria, Nigeria and Nepal, it has also set foot in Sri Lanka, Turkey, and Bangladesh. Tier 2 markets such as Kenya and Ghana are on its radar as well. During the diplomatic row between India and Canada last year, Leverage Edu reportedly continued sending students from Nigeria and Ghana to Canadian universities, helping the company expand in the face of competition.
Other players like EduVelocity are following a similar strategy. According to founder Vinu Warrier, UAE students have become a significant revenue stream for the firm. International students generally engage earlier and spend more, Warrier noted. Leap Scholar, backed by Apis Partners and Owl Ventures, is deliberating a foray into China and is in advanced talks to acquire Prodigy Finance with a view to facilitating its expansions.
As destination preferences evolve, platforms like upGrad Study Abroad are seeing a shift in student enrollment patterns. While 27% of students initially bound for the US this fall have moved to other countries, Germany's share of enrollment has risen from 34% to 41%, France from 3% to 8%, and Finland from 2% to 5%. Some countries like France are responding proactively to this diaspora, publicly opening admissions to students affected by US restrictions. The UAE has also introduced a 10-year "golden visa" for students with impressive academic records from top-ranked institutions.
However, the road to expansion comes with its own set of challenges. As the market focus shifts from the Big Four to new destinations, platforms must rely more on agents and invest in university tie-ups. While their earlier marketing efforts were largely inbound and organic, the new approach requires more expenditure towards building brand awareness, developing relationships, and establishing credibility in emerging markets.
Industry experts predict consolidation as the market faces prolonged challenges. According to Ankit Mehra, the chief of GyanDhan, if the current scenario continues for another six to eight months, consolidation is a foregone conclusion. Despite the turbulent times, country recovery is seeing a ray of hope, with Mehra anticipating Australia to bounce back first, possibly this year, Canada by early 2025, and the US by spring 2026.
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