Tier-four and -five cities such as Guntur, Ongole (Andhra Pradesh), Khammam, Warangal, Nalgonda, and Karimnagar (Telangana) are seeing a flurry of applications for the Test of English as a Foreign Language (Toefl) and Graduate Record Examinations (GRE).

According to data shared with Mint, the number of applications for Toefl from Guntur crossed Mumbai to record the second highest number of applications in FY22 and FY23. Similarly, Ongole and Prakasam, both in Andhra, entered the list of top 20 Indian cities in FY23, pushing capital New Delhi lower in the list for GRE applications.

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(Graphics: Mint)

Noting the increased interest, consulting firms and non-banking financial companies (NBFCs) are pushing their teams to head further interiors, offering discounts to tap a vast catchment area of candidates.

“Aspiration of Indian students is percolating from no longer a tier-I or tier-II cities but from tier-IV and -V. (Heading abroad) is no longer a tier-I or a metro phenomenon,” said Sachin Jain, country head, ETS India & South Asia.

ETS India is a subsidiary of ETS International B.V., which conducts Toefl and GRE assessments. Both are standardized tests used to measure proficiency in English or assessment in certain skill sets that are used for admissions in many universities abroad.

The rush to head abroad from interiors of Punjab, AP, Telangana, and Haryana also comes in at a time when macroeconomic sluggishness has impacted capability of sectors such as IT to hire its usual number of freshers.

Students are heading to the US, Australia, Canada, Germany, the Netherlands, and Sweden for graduate and post-graduate programmes in life sciences, MBA, engineering, law, among others.

In fact, the demand is high from these smaller cities and NBFCs such as Eduvanz are launching platforms that will look into the higher education market.

“The teams have been asked to focus on tier-III and -IV cities and many do not have access to education counsellors. The penetration of internet along with access to network of agents have made these places important market,” said Varun Chopra, co-founder and chief executive of Eduvanz.

According to consultants, while the education loan amount between a candidate in tier-I and -III may hover around similar range, companies are ready to roll out discounts in ancillary services like counselling to attract more candidates from the smaller towns. Eduvanz, for instance, said it will look into the affordability factor depending on the demography of the candidate.

Another NBFC, GyanDhan, has seen the share of candidates from larger cities get nudged out by those from smaller towns. “Education loans of more than 3 crore were disbursed in each of the top 20 cities in FY22. In the first six months of this fiscal, more than 50 cities have already met that mark,” said Ankit Mehra, co-founder and CEO of NBFC GyanDhan.”

The founder noted that the loan ticket may be marginally smaller because often the counsellors have access to smaller universities abroad. “In FY22, top six cities (including Hyderabad, Bengaluru, Mumbai, and New Delhi) contributed to 62% of overall loans which is down to 52% in FY24,” he added,

The numbers from states such as Punjab have also seen a spike in recent years as Mint had reported in September.

The majority of candidates have applied for entry- and mid-level positions, spanning sectors such as retail, business services and manufacturing NBFCs, recruiters and consultants are witnessing a fivefold increase in the migration of students and young professionals from Punjab to Canada, Australia, and Europe.

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Updated: 04 Nov 2023, 11:17 AM IST