Study abroad ambitions are rising but so is the cost of financing them.
An overseas education might cost you ₹17-18 lakh more than five years ago for the same dollar-priced degree.
And with tighter post-study work opportunities abroad in recent years, Indian students routinely ask me at GradRight whether they will get better education loans for STEM vs non-STEM courses abroad.
So, let’s first clear a myth about lenders treating STEM courses differently from non‑STEM ones when approving or pricing loans.
We will also unpack how you can smartly match a STEM or non‑STEM course with the right lender.
Do banks offer different education loans for STEM and non‑STEM courses?
The short answer is no. Lenders don’t have separate products like “STEM education loan” vs “non‑STEM education loan” in their official policy docs.
Indian banks, NBFCs and international lenders use a common education loan framework when they assess overseas financing, which includes your:
- admission,
- co‑borrower profile,
- credit history, and
- future earning potential.
Yet the STEM vs non‑STEM idea persists because banks and NBFCs may appear to offer easier terms (like larger loan amounts or flexible repayment) on courses with stronger employment outcomes in high‑demand fields.
That perception feeds into STEM vs non-STEM loan comparisons in India.
How do lenders assess education loan eligibility for study abroad?
The criteria for approving an education loan abroad is the same for STEM and non‑STEM courses Lenders’ risk and repayment likelihood is based on:
- Future earning: Programs or courses with higher expected salaries reduce the lender’s risk.
- Job market demand: Labour demand indicators also feed into lender risk models because longer work terms can mean steadier cash flows.
- University/program reputation: Graduates from top‑ranked or employability‑strong universities are seen as lower risk than lesser‑known or oversubscribed programs.
- Co‑borrower strength: Income stability, credit score, and documentation quality for your co‑applicant still matter far more than course label alone.
Put together, there is not much difference in education loan eligibility for STEM and non‑STEM courses. Universities and degrees with higher earning potential and post-study job opportunities in both fields will lead to a more favourable education loan.
So, why do loans lend more for STEM courses? Let us compare STEM and non-STEM degree’s post-study work opportunities.
STEM vs non‑STEM: Cost and earning realities
STEM programmes often carry higher tuition and living costs because they include lab fees, research credits, or technical practicum components.
But they also show patterns of higher earning potential after the degree.
Why STEM Courses Might Appear “Safer” To Lenders
Many lenders informally reward STEM profiles because they connect directly to measurable employability and repayment confidence.
Here is why lenders might favor STEM courses:
- Strong Job Absorption: In countries like the USA and Canada, STEM fields such as software engineering, data analytics, and biotech consistently show higher starting salaries and stronger demand.
For instance, STEM graduates in the US can see average starting salaries well into $80,000-$120,000 range in tech, engineering, and healthcare roles.
This kind of salary confidence makes future repayment easier to model.
- Post‑study Work Advantages: STEM graduates also benefit from extended work visas.
After graduation, STEM students in the USA get a 24-month STEM OPT extension on top of regular post-completion OPT.
So, many STEM graduates can effectively get up to three years of work runway. That extra runway lowers the lender’s perceived repayment risk.
- Unsecured Loans: Because future earnings in STEM are easier to model, some lenders are willing to offer larger unsecured limits.
Axis Bank mentions unsecured education loans up to ₹1 crore for “premier courses abroad.”
However, a STEM course alone does not override weak academic profiles or unranked universities.
Arts, humanities, communication and social sciences can also offer excellent returns at strong schools.
Non‑STEM Courses Still Qualify For Strong Education Loans
Non‑STEM courses are not unfriendly for education study abroad loans.
Degrees in management, economics, public policy, design, law, media sciences and international relations can have predictable career trajectories and excellent placement histories.
Graduates of the HEC Paris Master in Management, which was ranked #2 worldwide by Financial Times, had a 99 % employment rate within three months of finishing the degree in 2025. It also reported a €121 k average salary three years after graduation. That kind of outcome is also compelling to lenders.
Some countries’ job markets also give graduates from creative and business disciplines strong hiring curves, especially with post‑study work visas.
For instance, London’s creative industries added 308,000 jobs in 2024, which supported non-STEM fields like design, gaming and film production.
Forbes also listed graphic/UX design among 2024’s three top earning bachelor’s with mid-career salaries hovering around $110 k in the USA.
Individual programme outcomes matter more than a general STEM vs non‑STEM comparison. All in all, switching to a STEM degree only for loan approval can backfire.
STEM vs non‑STEM study abroad education loans: Final thoughts
Choosing a course only for perceived loan safety can soon turn into regret later. A mismatch between your skills and interests and the course might cause poorer performance and late placements. This, in turn, lowers your job or internship prospects and ultimately your ability to repay on schedule.
Rejection by one lender does not mean your profile is unfundable. Some lenders prioritise placements and outcomes more than others.
At GradRight, we see students who were declined by one bank come back with competitive bids from multiple lenders because their placement data and future earnings prospects were strong.
Anushree found Prodigy Finance at GradRight in 2023 and later went on to study Master’s in Human Resource Management at Pace University,
“Typical Indian banks won’t give loans to orphans who don’t have co-signers. If there was no Prodigy, I wouldn’t be here because Indian lenders would not give me a loan.”
GradRight’s loan and course search platforms help you compare multiple education loan offers and university programs side by side, so you make a data informed choice about your lender and course.
