Mumbai, Oct 31 (NationPress) A recent announcement by the United States regarding the H-1B visa petitions for international workers has eased some worries surrounding the asset quality of education loan portfolios held by non-banking finance companies (NBFCs), as per a report published on Friday.

The substantial rise in the one-time petition fee for new H-1B visa applications, which takes effect on September 21, 2025, could impact the employability of foreign nationals by significantly increasing the cost associated with hiring foreign talent.

The Crisil report indicates that the U.S. represents the largest market for NBFCs that focus on education loans, constituting 46 percent of the outstanding loan book as of June 30, 2025, which raised alarms about the asset quality of these financial entities.

However, the recent clarification from the U.S. confirms that the elevated one-time fee is applicable only to foreign nationals located outside the U.S. Moreover, it pertains solely to new H-1B petitions and does not affect transitions from one visa type to another, such as from F-1 to H-1B, according to the report.

Despite this clarification, the shifting and uncertain policy landscape for foreign workers has already rendered the U.S., the top market for higher education, a less appealing destination, leading to a slowdown in education loan book growth for NBFCs, the report suggests.

Crisil Ratings director Malvika Bhotika mentioned, “The recent clarification shows that the increased H-1B visa fee does not impact students already in the U.S. Furthermore, these students can still work in the U.S. for up to three years on an F-1 visa after completing their studies under the Optional Practical Training (OPT) program. This significantly reduces concerns about the future employability of these students and mitigates asset quality fears related to existing loan portfolios of NBFCs in the education loan sector.”

While the H-1B visa fee clarification provides comfort to education loan-focused NBFCs, other evolving policy uncertainties in the U.S. require vigilant observation. A critical policy currently under examination is the OPT program. Any restrictions or outright elimination of this program could put significant pressure on the asset quality of education loans, as students may face challenges in securing employment and repaying their loans as expected, the report states.

Moreover, approximately 85 percent of the overall loan portfolio is currently under a contractual moratorium, meaning equated monthly installment (EMI) payments have not yet begun. Specifically, for the U.S.-linked portfolio, it is estimated that around one-third of the portfolio will start EMI payments by the end of fiscal 2026. However, as a larger portion of the portfolio transitions to EMI payments each year, any future policy changes impacting employment could significantly affect asset quality, according to the report.

It is worth noting that the education loan portfolio of NBFCs has performed well thus far, with over 90 days past due (dpd) being low at approximately 0.2 percent as of June 30, 2025. Even when accounting for the moratorium, the 90+ dpd for the EMI-paying portion was also low at about 1 percent.

In light of these developments, students are considering education opportunities in alternative regions due to the heightened perceived risks associated with pursuing higher education in the U.S.

This shift, coupled with deliberate diversification by lenders, has resulted in a decrease in the share of the U.S. in new disbursements of education loans—this proportion was 15 percent in the initial three months of this fiscal year compared to 36 percent in fiscal 2025 and 55 percent in fiscal 2024, the report concluded.