International students will spend half a trillion dollars on studying abroad by the end of the decade, the head of a student finance company has predicted.
Speaking on a PIE Chat Live earlier this week, Vaibhav Singh, co-founder of Leap, outlined that there is already a $200 billion annual spend on international study that is growing by “at least 8-10% each year”.
Singh emphasised the importance of financing solutions like Leap Finance, which primarily provides loans to Indian students planning to study overseas, predicting that these will “accelerate how fast we get there and above and beyond that”.
“It’s a very very large opportunity,” he said, adding that student loans are “often the make or break need in whether a student from an emerging market can move abroad”.
“By participating in that slice of risk, we are able to ensure that we take the credit decisions”
But “the big challenge” in facilitating education finance is the requirement to take on monetary risk, Singh argued, commenting that “you need to be a producer, you can’t just be an aggregator”.
“You can’t just be sourcing leads for existing banks and saying ‘hey, you take all the risk’ – because then ultimately access gets restricted,” Singh said.
“By participating in that slice of risk, we are able to ensure that we take the credit decisions”.
Leap, which last month revealed that it had raised $75 million in its latest funding round, has facilitated “just under” $500 million in loans since it launched in 2019, and will disburse a further $300 million this autumn, according to Singh.
Earlier this year, The PIE News reported that student finance platforms were experiencing a surge in loan applications from Indian students, as students become more aware of financing options.
Singh claimed that Indian students are currently spending more than $10 billion annually on studying abroad.
Leap also runs study abroad platforms LeapScholar and Yocket in an effort to provide a “one-stop shop” for students.
“My big realisation before I launched Leap is the fact that the average student moving abroad was taking products and services from at a minimum five or six different providers,” said Singh, explaining that Leap currently provides two products per customer on average.
His comments come as other study abroad companies move into financing. In January this year, Leverage Edu launched a new range of financial services including international remittances, education loans and international bank accounts, while ApplyBoard recently partnered with the Royal Bank of Canada to support students to provide proof of funds.
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