Trump’s Visa Policies Could Seriously Impact Student Financing For Indians In 2025

Editor’s Note: This is the first story of The Core’s year-end series ‘2025 Through The Trump Lens’. In this series, we aim to look at how president-elect Donald Trump's upcoming policies are likely to affect Indians and Indian businesses.

Jugal Bhatt, a post-graduate student pursuing a master's degree in computer science at the University of Illinois Urbana-Champaign in Chicago, feels a sense of uncertainty as Donald Trump prepares to become the president of the United States in 2025.

Speaking to The Core about his worries, Bhatt said, “If international students here can't get a sponsored visa post their graduation in the US, then a majority of them will likely look for employment in Canada, and if that isn’t possible, then I foresee most students would rather move to their home countries.”

Bhatt, originally from Surat, Gujarat, has a Btech in computer science from Vellore Institute of Technology. Bhatt also works as an education and career counselling expert in his free time helping Indian students move abroad. He said that others like him also have a contingency plan of moving to Canada and getting work permits and permanent residencies there. This way “they could work in the US using the Canada-US treaty. Canada's pay is comparable to the US”.

Students like Bhatt are making mental preparations as they may face mounting education debt and uncertainty under president-elect Trump’s anti-immigration threats. Indians aspiring to study in the US usually make significant financial commitments, often shouldering substantial education loans to pursue their academic dreams.

Data from ForeignAdmits reveals that the average education loan for a US Master's degree has reached a staggering Rs 40.6 lakhs. This substantial financial undertaking highlights the immense faith these students and their families place in the value of a US education and the potential for future career prospects. However, the landscape of US immigration policies is set to change drastically, particularly with the protectionism threats made by US president-elect Trump.

Education and immigration experts that The Core spoke to said that any reduction in optional practical training (OPT) timelines or restriction in converting F-1 student visas to work visas could result in a potential loss of earnings, extending the loan repayment period for both existing and aspiring students. Consequently, students need robust contingency plans, including exploring alternative visa options like the O-1 or L-1 or consider studying in countries like Canada or other European countries.

Drastic Visa Cuts

Following Trump’s victory, many students currently studying in the US and those aspiring to go there are worried that his second term might see more drastic cuts to F-1 and H1-B visas — two big series of visa categories that are majorly used by Indian students and workers to immigrate.

Of particular concern for students aspiring to work in the US is the OPT. OPT is a programme that allows F-1 visa holders to gain practical work experience in their field of study in the US. Students often spend a significant amount of money on OPT, including application fees, legal consultations, and other associated costs, to secure internships or jobs that can lead to H1-B or other work visas. These work opportunities are crucial for students not just to gain practical experience but also to potentially pave the way for long-term employment and a chance to settle in the US.

However, many reports indicate that there could be changes to OPT, especially concerning how F-1 visa holders transition to OPT, with potential reductions in the OPT extension, which currently ranges from one to two years.

Bhatt said that he is sceptical about changes to OPT programmes affecting Indian students currently enrolled in institutions. This is because he believes that Trump’s first priority is curbing illegal immigration and not those who are already here via existing approved visas.

Could Getting Loans Become More Difficult?

The stakes are further amplified by the sheer number of Indian students venturing to the US for higher education. Following a pandemic-induced lull in 2020, where only 6,646 F-1 visas were issued, the US witnessed a surge in Indian students in 2022 and 2023, with 93,181 visas granted during the first nine months of 2022 as universities reopened and processed deferred admissions.

Data shared by the US State Department also showed that between January to September 2023, F-1 Visas issued to Indian students went up to a record 1,03,495. However, the same data indicates a sudden drop in 2024, with only 64,008 F-1 visas issued in the first nine months, a 38% decline compared to the same period in 2023.

With education loans often exceeding Rs 1 crore for top US universities, Indian students are making a substantial financial investment in their future. However, uncertainties surrounding OPT and H1-B visas could jeopardise their ability to secure well-paying jobs and repay these loans.

Sonal Kapoor, chief global of student loan provider Prodigy Finance said that in the scenario where there are some visa-related cuts, lenders would remain committed to supporting students including moratorium benefits or other forms of relief based on their lending models and policies.

“As for Prodigy Finance… our students had planned their studies well in advance, and fortunately, we haven’t seen any significant issues affecting their visa applications. We anyways offer a grace period of six months for students who have completed their full-time courses. This allows graduates time to transition into the workforce without the immediate pressure of loan repayments,” added Kapoor.

Several companies like Prodigy Finance, MPOWER Financing, and GradRight offer loans to Indian students pursuing education in the US through partnerships with US banks and universities. These partnerships often involve working closely with universities to understand intake numbers and identify courses with promising job opportunities.

While many students utilise these options, some also take loans from Indian banks. However, students and education experts warn that US banks may not be as accommodating with adjustments and relaxations as Indian banks in the event of drastic cuts to student visa policies

"I don't think US banks would offer relief...they have to maintain loans to international students, which is already a high risk for them. If they lower the interest or give relief, the priority would be US citizens. But Indian banks, on the other hand, have almost no options to get the money back if the student can't repay. So they would rather increase the repayment timeline...they can't hold you at gunpoint," said Bhatt.

Financial Gamble

Jaideep Kewalramani, head of employability and COO of TeamLease EdTech, acknowledges that potential changes to F-1 and H1-B visas increase the risk profile for banks providing education loans. These loans are often granted with the expectation that students will study, work, and potentially settle in the US, increasing their earning capacity and ability to repay. However, if students are forced to return to India due to visa restrictions, their repayment ability might be impacted.

In almost all instances, most Indian students in universities abroad need well-paying jobs immediately after graduation even though there are moratoriums, mainly because of the high size of these loans. According to a report published by UniCreds, in 2021 alone, 56,930 students applied for education loans while before the pandemic in 2019, some 69,183 students applied for education loans. In the last 10 years alone, Rs 39,268.82 crore were disbursed to Indian students going abroad, the report added. The loan amounts vary anywhere from Rs 10-50 lakhs, and in many cases, these students risk losing their family homes, and land which is put up as collateral for these loans.

Kewalramani highlights that while Indian students may find suitable jobs upon returning, the salaries might not match those offered in the US. This could affect their ability to repay loans as quickly as initially anticipated by banks. However, he emphasises that Indian banks are generally accommodative towards students facing such challenges.

“They recognise the value of intellectual capital and the potential of the knowledge economy, and are therefore likely to offer flexibility in repayment options to avoid creating a negative situation for returning students,” Kewalramani said.

According to an analysis in the foreign affairs journal The India Forum, US universities, facing budget cuts and rising costs, are increasingly relying on tuition fee revenue by expanding their programmes, often with questionable quality and limited job prospects. This expansion includes larger class sizes, even in popular STEM and business programs at prestigious universities, sometimes exceeding 1,000 students. The article suggests that these practices raise concerns about the quality of education and the value proposition for international students, especially for those coming from India on hefty education loans.

"If you look at the past few years' data, undergrads have been a small percentage of Indians coming to the US... Top universities don't have an issue filling undergrad quotas. But universities not in the top 100... might have a hard time, so they bring out more Master's programs. It's not a high financial burden for international students – just 1.5 or 2 years of study, and it keeps the university running,” said Bhat.

He further added that F-1 visa rejections have been high lately because universities are starting new courses that US Customs and Border Protection haven't even heard of. When a student applies for an F-1 visa for those programs at less reputed universities, it's tricky to get it as it raises red flags at the time of visa application.

Manu Smadja, CEO and co-founder of MPOWER Financing, said there has been a rising cost of education in the US, with average loan sizes increasing by 5% annually due to inflation and tuition hikes. Smadja added that given the unpredictability of the upcoming Trump administration, visa extension and renewal policies, universities from other countries, such as Canada, Germany, and Australia, offer more relaxed immigration policies and potentially higher chances of securing permanent residency. This may become popular among F-1 visa-holding students in the US, he added. But this also means that in addition to the financial implications and shifting study destinations, students should also be prepared for increased scrutiny during visa interviews and at the border.

However, in a recent development, the outgoing Biden administration has announced relaxations of H-1B visa rules, making it easier for US companies to hire skilled immigrant workers and making it easier for students looking to transition from F-1 student visas to H-1B visas. This move is expected to benefit thousands of Indian professionals and students who have been facing uncertainty and challenges in securing work visas in the US, experts pointed out.

“The US Citizenship and Immigration Services (USCIS) have (in September) clarified policies regarding OPT, particularly for STEM students, allowing for a 60-day grace period after OPT completion and permitting limited online courses to count towards study requirements. This is welcomed news for F-1 Visa students, including G-1 visa holders who may be transitioning to or participating in OPT,” said Kapoor of Prodigy Finance.

While the recent easing of H-1B visa rules by the Biden administration offers a ray of hope for Indian students and workers, the path to securing a coveted spot in the US job market remains highly competitive.