Karnataka has emerged as one of the leading states in education financing, ranking second in India for education loan disbursements, according to a report released by fintech education lender Propelld. The report, titled “Karnataka’s Education Loan Story – Trends, Insights and Impact,” highlights key trends shaping the state’s higher education landscape over the past five years, including a sharp rise in women applicants and the increasing role of digital lending in making education more accessible.

Women driving the surge in education loans

One of the most striking findings of the report is the 30.7% rise in female education loan applicants between 2019 and 2024. The steady increase in women borrowers—from 26.32% in 2019 to 34.11% in 2024—reflects a significant societal shift toward gender inclusivity in higher education.

Speaking about this transformation, Bibhu Prasad Das, Co-founder of Propelld, emphasised the importance of policy-driven interventions. “While it is encouraging to see more women investing in their careers, corporate and government-level policies must further support their professional growth. Women’s participation in education financing is a sign of a broader cultural shift towards gender balance in the workplace,” he noted. According to the report, 18.6% of women in the 25-30 age group took loans for upskilling compared to 21% of men, underscoring the growing aspirations among women professionals.

Tier-2 cities emerging as education hubs

The report also sheds light on the rise of Tier-2 cities like Mysore, Belgaum, Dharwad and Kolar as education investment hotspots. As access to quality education improves outside Bengaluru, these cities are attracting students seeking career advancement opportunities. Propelld’s Co-founder Victor Senapaty attributed this trend to digital lending innovations that are bridging the financial gap for students from diverse socio-economic backgrounds.

“The digital lending revolution is democratising education financing and ensuring that students from smaller cities are no longer left behind. Self-employed families, traditionally overlooked by conventional lenders, are now actively investing in their children’s higher education. This shift is crucial in making education more inclusive,” Senapaty said.

Tech-driven upskilling and shifting course preferences

The report also explores the changing landscape of course preferences among Karnataka’s students. While Data Science courses once dominated the upskilling market, their popularity has waned in recent years. However, a strong demand for technology-driven certifications among early-career professionals continues, as individuals look to stay competitive in an evolving job market.

Propelld’s Co-founder Brijesh Samantaray highlighted how the state’s education financing ecosystem is witnessing a transformation. “We have disbursed Rs 319.94 crore in Karnataka over the past five years, and our data shows that the state has one of the lowest education loan defaults in the country, with only 6% of our Non-Performing Assets (NPA) coming from Karnataka. This reflects the high awareness levels regarding education’s importance among Karnataka’s residents,” he said.

Samantaray also credited government initiatives aimed at increasing Gross Enrollment Ratios (GER), particularly among tribal students, as a key driver of this growth.