Why transparency in remittances is critical for Indian families funding global education

Every rupee counts when it comes to funding a child’s education abroad. Yet in 2024 alone, Indian families lost nearly USD 200 million (INR 1,700 crore) to hidden exchange rate markups and banking fees while sending money overseas. That is money that could have gone towards tuition, rent, or even an extra semester of study - instead, it was lost in the system.

For many families, overseas education is the single biggest investment after buying a home. Yet, the financial system meant to support this ambition has not evolved at the same pace — especially when Indian students now represent nearly one-third of international enrollments in the US, UK, Canada, Australia, and Germany.

The hidden cost of remittances
More than 95% of India’s education-related payments, worth an estimated USD 10–11 billion annually (₹85,000 to ₹93,500 crore), are still processed through traditional banks. These channels often add markups of 3–3.5% on exchange rates and can take days to complete transfers.

For a family sending around USD 35,000 annually (₹30 lakh), this translates into losses of USD 700–880 (₹60,000–75,000) — enough to cover several months of living expenses abroad or fund additional courses. Families are left uncertain about two very basic things: how much of their money will reach their children, and when will it arrive.

A fragmented system and why transparency matters
The friction lies in the way payments move across borders. Traditional banks continue to depend on the correspondent banking network, where a transaction moves through several intermediaries before reaching its destination. Each institution in the chain adds its own costs and delays, leaving families to bear the burden.

Policy changes such as higher Liberalised Remittance Scheme (LRS) limits or recent relief on Tax Collected at Source (TCS) have improved access. But these do not solve the structural problems of opaque and expensive transfers. Families may be global in ambition, but the rails moving their money remain outdated. This gap has opened the door for innovative players like Wise, Instarem and Remitly, who have built infrastructure designed to offer low-cost, fast, and convenient international transactions. Families can see the exchange rate, the fees and the delivery timeline upfront, and they can track the transfer as it moves. As Harusha, a student in the United States, shared: "My family usually sends money through bank transfers, but waiting 2 to 3 days can be frustrating, especially in urgent situations. That's when I switched to instant remittance platforms - they’re quick, easy and hassle-free."

Harusha’s transfer experience should not be the exception. It should be the standard.

The way forward
India’s role in global student mobility will only grow, and the financial infrastructure that underpins it must evolve in tandem. We need policies that mandate transparent, upfront pricing and eliminate hidden costs and uncertainty. When families are making sacrifices to secure their children's future, the least the system can do is ensure their money arrives in full and on time - without mystery.


(Disclaimer: The opinions expressed in this column are that of the writer. The facts and opinions expressed here do not reflect the views of www.economictimes.com)