By Nick Clark, Editor, World Education News & Reviews
Indian students travel abroad to study in large numbers, and they have become an important source of international enrollment diversity, research strength and revenue for institutions of higher education across the world, and especially so in countries where English is the national language. In the last couple of years, however, the total number of overseas Indian students has been shrinking, a trend that has been generally attributed to the global financial crisis, a devaluing rupee and changes to immigration laws in top host nations.
The United States has long been the most popular study abroad destination for Indians, and while this continues to be the case, the total number of Indians on U.S. student visas has been on the wane since 2010. And the picture looking forward is somewhat unclear, especially in light of two recent and somewhat contradictory reports from two prominent and widely cited international enrollment surveys.
In this article, we take a look at current and forward-looking Indian enrollment data from top host nations, while also offering an additional point of reference with regards to future U.S. enrollment trends based on recent changes in the volume of applications received by World Education Services (WES) for education-related credential evaluations from India-based applicants.
The Global Picture
The United States is clearly the favored destination among overseas Indian students, with close to 100,000 student-visa-holding Indians in the United States in 2012/13. Nonetheless, what was previously a story of strong enrollment growth prior to the global financial crisis of 2008 has turned into stagnation and now decline. The United Kingdom and Australia have witnessed similar, if more pronounced, downward trend lines in Indian enrollments over the same period. The only country that continues to see strong and continued enrollment growth from India is Canada. Growth in New Zealand, China and Germany has been slower, but generally steady.
The United Kingdom
The United Kingdom saw strong growth in Indian enrollments during the second half of the last decade to a high of 39,090 students in 2010, before a precipitous drop to 29,900 in 2011 with further declines expected for 2012 when those data are reported by the Higher Education Statistics Agency  in January.
According to a recent survey by Times Higher Education , Indian graduate applications for 2013/14 dropped by an average of 8 percent versus 2012/13, with some of the UK’s top universities reporting declines of nearly 30 percent. By contrast, the overall application picture from non-EU students for 2013/14, according to the survey, shows growth of just under 9 percent. The results are based on survey responses from 18 institutions of higher education that supplied figures.
There are two commonly cited reasons for the sudden and precipitous decline in Indian interest in UK higher education: the weakening of the Indian rupee versus the British pound, and the UK government’s recent immigration crackdown including its 2012 tightening of post-study work options.
The Indian rupee has weakened against most major currencies over the last four years, but has lost over half its value against the pound since 2010, losing 25 percent alone since May of this year, making the already expensive cost of living and studying in the UK that much more burdensome. From mid-May to mid-September, the rupee’s value declined 17.4 percent against the pound, 14.5 percent against the US dollar, but only 10 percent against the Australian dollar. For Indians, a majority of whom are self-financed through private loans, cost and return-on-investment calculations are a major deciding factor when choosing where to study abroad, making them particularly sensitive to currency fluctuations.
And not only has the weakening rupee made the cost of a UK degree significantly more expensive, but the government’s April 2012 tightening of post-study work options has made the investment in a UK degree less likely to offer a return in the form of well-paying jobs after graduation. Students wishing to stay on for work must now qualify through the employment visa route and they need the offer of a job paying more than £20,000 (US$32,000) a year. The 24 percent drop in Indian students in 2011-12 was widely blamed on the end of the automatic right to work in Britain on a student visa for two years post-graduation.
The story in Australia with regards to Indian higher education enrollments has been similar to that of the UK. The country’s institutions of education saw extraordinarily strong growth through much of the last decade, and especially so in the vocational education & training (VET) sector between 2005 and 2010. The bigger gains in higher education (degree) enrollments were seen in the first half of the last decade, although growth remained in place until 2008. Across all sectors, there were 120,496 enrollments among student-visa carrying Indians in 2009. By 2012 that number had dropped 55 percent to 53,951.
The precipitous drop in interest from Indian students was brought about by a perfect storm of factors beginning in 2009 with the significant strengthening of the Australian dollar versus the rupee. This was followed by a major clamp down on student immigration and citizenship laws, and capped with months of terrible press in the Indian media following a spate of racially motivated attacks and killings of Indian students in the second half of 2009.
Nonetheless, the most recent data for 2013 show that degree-granting institutions of higher education in Australia are seeing renewed interest from Indian students, with 15,194 enrollments as of August 2013 versus 11,840 at the same time last year. Additionally, new enrollments – or commencements – were up 17.7 percent in 2012 versus 2011 to a total of 5,658, while 2013 commencements to August are up 59.6 percent (7,770) versus the same time last year.
Within the Australian higher education sector, therefore, Indian enrollments look set for a strong comeback, albeit from lows not seen since 2003 (12,433). The main catalyst for the renewed interest from India appears to be 2012 changes to Australia’s visa processing system, with universities now able to fast track visas under the streamlined visa-processing scheme, while also reducing scrutiny from the Immigration Department.
But perhaps the most important immigration reform for Indians looking at Australia are 2012 changes to the Skilled Graduate Visa Scheme, which from this year make international students who graduate from Australian universities eligible for work visas lasting two to four years. Previously, only students studying for select occupations (trades, medicine, engineering, architecture, accounting and teaching) were allowed to work in Australia for up to 18 months. Other overseas students were required to leave Australia within a month of graduation. The VET sector, which is not included under the new visa-processing changes, continues to see dramatic declines in enrollments from India.
New laws being proposed by Australia’s new government also look promising for future enrollments from India. According to the recommendations of the Review of the Student Visa Assessment Level Framework 2013  report, released in late October of this year, financial requirements will be reduced for student visa applicants from Assessment Level 4 countries like India, Nepal and Pakistan. This would mean students from India would be able to apply for a student visa with up to A$40,000 (US$37,000) less in the bank, according to Australia’s Immigration and Border Protection Ministry.
With the declining popularity of the United States, the UK and Australia as study destinations over the last couple of years, Canada looks set to soon assume the mantle as the second most popular country for Indians studying abroad, with enrollments booming by 23 percent to almost 29,000 in 2012, and trebling since 2009, according to recent figures  published by the Canadian Bureau of International Education .
The catalyst for Canada’s popularity among Indian students, and international students more broadly, has been immigration reform. Introduced in 2008, the Canadian Experience Class  allows skilled foreign workers and foreign graduates of Canadian institutions of higher education with work experience to apply for permanent residency without having to leave the country. This has proven popular with Indian students whose numbers have grown some 20,000 since the introduction of the new policy.
The program was made even more attractive last year, when the Canadian government expedited the process for those qualifying for the Canadian Experience Class to earn permanent residency in Canada. International students are now allowed to stay in the country for up to three years following graduation instead of two, while they now only need only 12 months of work experience within three years to be eligible for residency.
As of September 2012, 20,000 foreigners had attained permanent resident status in Canada under the program, with many more sure to follow. And Canada wants more. According to a national strategy for international education  released last year, policymakers want to double the number of full-time international students in Canada from 239,000 in 2011 to over 450,000 by 2020. Growth from India, Canada’s second-largest source of international students (after China), will be key to meeting that goal.
The United States
Indian students in the United States have traditionally studied at the graduate level, and this continues to be the case with almost 80 percent of all active students (not including Optional Practical Training ) enrolled at the graduate level in the last academic year. However, student numbers have been declining at both the undergraduate and graduate levels since 2008-09. The only classification that has been expanding since that time is Optional Practical Training (OPT).
The most recent headline figure for Indian enrollments shows a 3.5 percent decline between 2011/12 and 2012/13. However, if student visa holders engaged in a year of OPT are subtracted from the total, then the drop in the number of active students is significantly more pronounced. Since the 2008/09 academic year, there has been a 22 percent decline in the number of Indian students actively engaged in a program of study versus a smaller 6.3 percent overall decline when OPT figures are included in the total. Over the same time period, numbers have dropped by 23.1 percent at the graduate level and by 18.3 percent at the undergraduate level.
As can be seen from the table above, the slide in active Indian student numbers began after the 2008/09 academic year, just as the global financial situation was beginning to unravel. However, even as fewer students came to the country to study, increasing numbers of that diminishing pool stayed on for OPT, which delayed the drop in the total number of student-visa holding Indians in the United States until 2010/11.
Judging from this enrollment pattern and the growing preference among Indian students for a Canadian system that has been offering greatly improved work and immigration rights since 2008, one might argue the case that Indian students are turning away from the U.S. system of education and the immigration policies linked to it in favor of high quality destinations where they can expect a greater return on their educational investment. With the sliding rupee, a U.S. education might be too expensive for many Indians to afford, forcing them to seek out alternative options in countries like Canada that allow for generous post-graduation work rights as a means of recouping costs.
However, should the comprehensive immigration reform bill, currently languishing in the House of Representatives, be passed by the U.S. government then students would be able to declare “dual-intent” when applying for a visa, no longer having to promise to leave the country upon graduation. But more importantly it would increase the number of temporary work visas allotted according to the strength of the economy and lift the per country limits on green cards that produce wait lists of up to 10 years currently for would-be skilled immigrants from India. This could be a significant catalyst in driving new Indian enrollments.
Future Indian Enrollments in U.S. Higher Education
In addition to the IIE’s reporting on last year’s international enrollment numbers, the Open Doors report also includes survey results for current year enrollments through its Snapshot Survey . Although the survey size (380 responding institutions) is considerably smaller than it is for the Open Doors report (close to 3,000 institutions), the results show that Indian enrollments are continuing decline this year, and at a growing rate of 10 percent.
However, the IIE snapshot survey results significantly contradict data  released by the Council of Graduate Schools in early November, which show a current-year 40 percent increase in first-time Indian graduate enrollments at institutions that responded to the survey. Overall, the 285 institutions responding to the survey conferred 66 percent of the approximately 103,000 graduate degrees awarded to international students in the United States in 2010/11.
From an examination of other data sources, including recent WES data on applications for credential evaluation among prospective Indian students, we believe that the CGS data provide a more accurate picture of current and near-term enrollment trends among Indian students.
WES India Applicant Trends
At World Education Services we are seeing significant growth in the number of applications for credential evaluation from Indian citizens who noted “education” as the primary reason for evaluation on their initial application.
From the chart above, it can be seen that the growth in applications for WES credential evaluations from India-based applicants this year is in line with the 2012-2013 growth in applicant volume seen by respondents to the Council of Graduate Schools’ Phase II surveys  charting final application numbers to U.S. graduate schools.
An additional trend that we have seen at WES is in the share of applicants applying from an Indian address, as opposed to a U.S. address. For the first time in 2013, a majority of applications for the evaluation of Indian credentials are from non-U.S. addresses, a potential sign of increased future academic mobility from India to the United States. From January to October of this year, 51 percent of Indian applicants came from overseas versus just 38 percent in 2008.
With regards to level of study, we continue to see growing interest in graduate-level study among India applicants based outside the United States and indicating education as their reason for credential evaluation.
In defining the intended level of study, we use the highest level of credential being evaluated as a proxy. Students applying for an evaluation of secondary credentials would be considered undergraduate applicants, while students with undergraduate or graduate credentials would be considered graduate applicants.
Additional Data Trends
Early evidence from the current academic year from other data sources is also suggestive of a rise in Indian enrollments.
The U.S. Mission in India issued more than 40,000 student visas  in the 2013 fiscal year (October 2012 to September 2013). This represents a nearly 43 percent increase over fiscal year 2012.
Educational Testing Services, the organization responsible for administering the Graduate Records Examination (GRE), released data in November that showed an increase of almost 70 percent in the number of Indians taking the examination between July 2012 and June 2013 (56,782) versus the number taking the examination between August 2011 and June 2012 (33,504). While not all GRE test takers take the test with the intention of applying to a U.S. graduate school, the scale of the growth in Indian test takers is certainly suggestive of renewed interest in U.S. graduate schools.
Another test taken by tens of thousands of international students seeking entry to U.S. graduate schools is the Graduate Management Admission Test  (GMAT), administered by the Graduate Management Admission Council. Testing Year 2012 saw 30,213 Indian citizens taking the GMAT, up from 25,394 in 2011 , an increase of 19 percent and just shy of highs seen in 2009 (30,633). It should be noted here, however, that the volume of tests being sent to U.S. business schools from Indian test takers has dropped from 64 percent in 2008 to 51 percent in 2012.
Indian enrollments in foreign institutions of higher education have been declining over the last three years; however, the data suggest that a rebound is imminent. Australian universities are seeing vigorous growth this year in India enrollments, Canada continues to see strong and growing interest, and the U.S. – we think – is set for a rebound over the next few years. The only major receiving country that looks set for continued declines in enrollments from India is the United Kingdom, where recent changes to immigration and workplace policies appear to have been a major turn-off for price-sensitive Indian students.
Meanwhile, secondary receiving nations such as China, Germany and New Zealand are seeing growth in interest among Indian students. In the case of Germany and China, cost may be a crucial factor, while changes to immigration laws in New Zealand are helping the sector recover from the devastating impacts of the Christchurch earthquake, which resulted in a significant loss of international students in the country.
These trends are in line with the findings of a recent report  from the Research & Advisory Services  department at WES, which classifies a majority of Indian students as “Strivers” with limited financial means but good academic preparedness. By contrast, students from other major sending nations such as China and Saudi Arabia, a majority of whom are considered “Explorers” or “Highfliers” – both with significant financial means – are less sensitive to pricing and immigration policies. Half of all Indian students who responded to the recent WES survey reported that they took out loans to fund their overseas education, as compared to just 3 percent of Chinese students.
Potential return on investment, we believe, is a major driving force for Indians seeking overseas educations.