Better Dwelling, Canada’s largest independent housing news outlet, made waves earlier this week when it claimed that Indian demand for Canadian education had collapsed. Because Indians accounted for roughly 40% of all international students in Canada last year,1 any drop in Indian interest in studying in Canada is a big deal. And while we think the word “collapsed” overstates the situation, the data tells a compelling story.
Indian demand for a Canadian education did indeed decline significantly in the latter half of this year, and had yet to recover as of October.2 Read on for a breakdown of the data behind the trend, including our thoughts on what’s caused the drop-off, where the missing students have gone, and whether the sector should be concerned about the future.
Key Insights at a Glance
- IRCC processed almost 60,000 fewer study permits for Indian students from July to October 2023 versus the same period last year.
- Growing negative sentiment among Indians towards the Canadian international education sector may be the cause. The number of articles about housing in Canada increased fivefold in top-tier Indian media this year, with an uptick in negative-flagged content.
- Despite the application shortfall, strong study permit approval rates mean that Canada will almost certainly surpass last year’s total for study permits approved for Indian students.
- Correcting the current trajectory will require continued pro-student policy innovation from multiple levels of government, as well as alignment across other sector stakeholders.
Canadian Study Permit Applications Processed for Indians Down More than 40% Since July
The Canadian government processed3 almost 146,000 new study permit applications for Indian nationals from July to October last year. But across the same period in 2023, it processed fewer than 87,000. This represented a year-over-year decrease of 41%. Put another way, almost 60,000 fewer student visas4 were processed for Indian students from July to October 2023 than over the same period last year.
The chart below compares the monthly processing totals across the past two years:
The shortfall was particularly significant over the period from August to October, which was down 47% versus 2022. The drop-off is surprising given the strength of Indian student interest over the first six months of the year. From January to June 2023, the Canadian government processed 25% more study permit applications from Indian students than it did over the same period in 2022.
Negative Sentiment Toward Canada Growing in Indian Media
It’s tempting to suggest the diplomatic tensions that erupted between India and Canada caused the drop. After the rift erupted, stakeholders in Canada’s international education sector publicly expressed varying degrees of concern about the situation, with some counsellors recommending their Indian students pursue studies elsewhere.
However, as the Better Dwelling report highlights, the diplomatic incident didn’t occur until mid-September, so it would not have had an impact on student visa processing volumes until at least October. Better Dwelling posits a different theory:
More and more international students have been posting on social media about the hardships they faced in Canada, specifically calling out the high cost of living and lack of opportunity promised. – Stephen Punwasi, Co-Founder, Better Dwelling
While social media sentiment can be difficult to quantify, many of these stories are picked up by legacy media. To evaluate Punwasi’s assertion, our team conducted a sentiment analysis of top-tier Indian media. We found that, between April and August of 2023, the number of articles written about housing in Canada increased fivefold versus the same period last year. Additionally, the percentage of content flagged as negative rose from 12 to 30%, with Indian students’ financial hardships and unemployment challenges a consistent theme.
This evidence supports Punwasi’s proposition, showing that prospective Indian international students (and their parents) were exposed to a considerable amount of negative sentiment toward Canada’s international education sector and the challenges it faces shortly before and during the decline in applications processed.
We explored the breadth of the global housing shortage and how institutions can be part of the solution in our latest trends report.
Will the Shortfall in Applications Processed Translate into a Drop in Indian Students Coming to Canada?
Study permit applications processed are a strong indicator of foreign interest in studying in Canada. But to assess the impact on actual student inflows, we need to look at study permit approval rates.
The charts below break down the changes in student visa approval rate and volume since 2016:5
Because of the significant jump in study permit approval rates for Indian students this year, study permit approval volumes have continued to climb. In fact, 32,000 more Indian students were approved to study in Canada from January to September this year than last despite the drop in applications processed.
With this in mind, Canada will almost certainly surpass last year’s total for student visas approved for Indian students. If processing volumes remain near half of 2022 totals, we project 200,000 to 210,000 Indian students will be approved to study in Canada this year, depending on how the current approval rate holds. That would be a 5 to 8% increase over 2022—well below last year’s growth rate, but not a contraction in student mobility.
Measuring the Impact of the India-Canada Dispute
Barring an escalation, it appears unlikely that the India-Canada dispute will further depress the volume of study permit applications processed from India. There are two distinct factors to consider here: The impact of the India-Canada dispute on application processing, and the impact of the dispute on student demand.
First, application processing. According to IRCC reporting, 80% of study permit applications from Indian students processed between August and November were processed within three weeks. This suggests that despite the disruption in Canadian visa services due to the dispute, IRCC is prioritizing study permit processing. There may in fact be no real processing slowdown for study permit applicants due to the dispute.6
As for demand, if most study permit applications received by IRCC are processed within three weeks, applications received after the dispute became public on September 18 should have begun showing up in the applications processed data by early October. Thus, we would expect any additional decline in demand due to the dispute to begin showing up in that month’s data. But October’s applications processed total, while down 46% from 2022, was actually less depressed than September’s (-51%). Given this, the diplomatic row appears not to have had a compounding effect, perhaps because negative sentiment in India toward Canada was already considerable.
It’s encouraging to see that relations between the countries have normalized to some degree. However, complicating the situation further is IRCC’s recent announcement increasing the proof of financial support requirement for student visa applicants. The change shows that the Canadian government is taking seriously the economic hardships international students in Canada face, and is working to ensure they have the financial means to succeed. But the response from students has been mixed at best. While some students appreciate that the Canadian government is recognizing the challenges international students encounter, others see the suddenness and degree of the increase as significant barriers.7
This change is a positive development. It will help prospective students understand the true cost of living in Canada and ensure that Indians coming to Canada have the financial security to safeguard their wellbeing. As student experiences in Canada improve, we expect the new regulations to improve student sentiment in India in the long term, as well. However, it’s certain to cause a further drag on demand in 2024.
Indian Student Demand in the US, the UK, and Australia
If Indian students are choosing not to go to Canada, where else are they going? Student visa data from the other major English-language destinations suggests show no discernable gains, as the charts below demonstrate:
While the US and particularly Australia did see some growth over the period in question, it wasn’t nearly enough to account for Canada’s decline. The UK is facing its own drop in Indian student demand stemming from its decision to prohibit most international students from bringing dependents with them into the country.
We examined the impact of the UK’s dependents policy change on international student mobility in a previous ApplyInsights.
While it’s certainly possible Indian students are finding their way to destinations beyond the big four, we suspect many who have been rethinking their plans to go to Canada may simply be choosing to stay home. Our annual Recruitment Partner Pulse Survey found that Canada is perceived as the most affordable major study abroad destination by a considerable margin. It may be that students are—or perceive themselves to be—priced out of international education during this period of significant global inflation.
Canada’s Outlook Beyond India
If there’s a silver lining here, it’s that students from countries beyond India are still eager for a Canadian education. From July to October, the number of study permits processed for all other countries rose by 34%. For the year to date, study permits processed are up 52% from last year’s total.
The result is a much more diverse set of applicants to Canadian institutions. While Indian students submitted nearly half of all student visas processed last year, they have accounted for just 36% in 2023 to date. And the approval numbers tell a similar story. Indian students represented 46% of all students approved to study in Canada last year, but account for just 41% so far in 2023. This trend may both reflect and accelerate institutions’ commitment to improving the diversity of their international student inflows.
Key Takeaways
What does the future hold? As always, the answer is complicated. So long as students continue to face acute housing, financial, and employment challenges in Canada, they will continue to share their stories. And while legacy media may eventually move on, negative sentiment toward Canada is likely to solidify long before that happens. If the conditions in Canada persist, a long-term depression of Indian student demand is possible.
Crucially, however, we don’t think that sentiment has solidified yet. The Canadian government has taken considerable steps over the last few months to address the concerns students and other stakeholders have raised. And while reasonable criticisms have been made of these moves, including the decision to raise the proof of financial support requirement, we’re encouraged by the government’s willingness to act.
If the Canadian government continues to take decisive policy actions that put students first, and institutions, businesses, and other stakeholders work together to address housing shortages and build stronger pathways to prosperity post-graduation, we think Canada can return to 10 to 20% year-over-year growth in demand from Indian students. Couple this with strong growth from other emerging markets, and the Canadian international education sector has a clear path to long-term, sustainable growth and diversity.
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FOOTNOTES:
1. All data courtesy of Immigration, Refugees and Citizenship Canada (IRCC), except where noted. Statistics used in this article are for new study permits only.
2. November data not yet available.
3. Includes study permit applications approved, refused, and withdrawn by the applicant.
4. The terms student visa and study permit are generally used interchangeably for Canadian international students. Rather than a student visa, Canada provides an approved international student with a study permit, which allows that student to enroll in classes at Canadian institutions. When a student is accepted for a study permit, they are usually also provided with a visitor visa, which allows that student to enter Canada for their studies.
5. For the January to September period only. October 2023 study permit approvals data not yet available.
6. The impact on other visas seems likely to be more significant. Canadian Immigration Minister Marc Miller stated in late October that IRCC would not meet its end-of-year visa processing target for Indians.
7. In the same announcement, the government extended the waiver on the 20-hour-per-week limit on the number of hours international students are allowed to work off campus until the end of April 2024. This is something students have repeatedly called for, and it should be well received.
