Nepalis spent Rs93.89 billion in foreign currency on overseas education in the first eight months of the current fiscal year (mid-July to mid-March), up around 8 percent from the same period last year.

Nepal Rastra Bank data show Rs85.86 billion was spent under the same heading during the corresponding period of the previous fiscal year. Experts said the rise reflects a growing number of students leaving the country for higher education, pushing up the outflow of foreign currency.

The outflow tied to foreign study has been rising steadily in recent years, according to the central bank. Analysts attribute the trend to prospects of work and higher earnings abroad, which continue to draw students overseas. They said the trend has also contributed to remittance inflows.

Even as large numbers of Nepali students leave, foreign students continue to come to Nepal. In the review period, foreign students brought in Rs4.10 billion, up from Rs3.05 billion a year earlier.

Government reports show that prolonged political instability, weak economic performance and limited job creation have driven more youths to leave the country. Data since the Covid-19 pandemic also point to a steady rise in such outflows.

Former National Planning Commission vice-chair Prakash Kumar Shrestha said the state remains committed to improving education, but there is no policy to retain students within the country.

“Students cannot be told not to go abroad. Overseas education ultimately benefits the country through human capital formation and brain gain,” he said. “But the government needs a clear policy to bring back those who have acquired education, skills and capital abroad, which is still lacking.”

Shrestha said schools, colleges and universities in Nepal do not prioritise graduates with foreign degrees, making it harder for them to compete at home.

“Even if it cannot be done across all sectors at once, policies should be introduced where possible to create an enabling environment for such graduates to work in Nepal,” he said.

He added that the government should also step up efforts to attract more foreign students, noting Nepal’s potential to develop as an educational hub and a destination for education tourism.

“The private sector has already called for an increase in quotas for foreign students. The government should respond with appropriate policies,” he said.

Shrestha also stressed the need to simplify visa and administrative procedures to attract students from countries such as Myanmar and Bhutan.

After deducting inflows from foreign students, the net outflow in the first eight months stood at Rs92.89 billion. The comparable figure a year earlier was Rs85.86 billion.

In fiscal year 2024-25, Nepalis spent Rs138.48 billion on overseas education. The figure was Rs125.13 billion in 2023-24, Rs100.42 billion in 2022-23, Rs67.70 billion in 2021-22, Rs25.81 billion in 2019-20 and Rs46.32 billion in 2018-19, according to Nepal Rastra Bank data.

Foreign students, particularly in medicine, engineering, literature and culture, continue to come to Nepal. Their spending contributes to the country’s foreign currency earnings.

There are two broad views on the rising outflow linked to foreign study. One holds that there is little cause for concern, arguing that students going abroad do not just take money out but also acquire knowledge, skills and income, while raising Nepal’s profile internationally. Many are expected to return if domestic conditions improve.

The other view argues that the outflow reflects a lack of opportunities at home and warns that the government should intervene with targeted programmes to retain students. It also calls for a review of weaknesses in the education system and curriculum.

Despite the growing outflow, the government has no clear plan either to bring back students or to retain those who remain in Nepal. However, following central bank suggestions, it has in recent years halted approvals for affiliations with foreign educational institutions.

The 16th Five-Year Plan outlines policy measures to reform the education sector. It proposes increasing the share of students in technical streams, improving learning outcomes and making education more employment-oriented to curb the trend of studying abroad.

The plan also calls for strengthening infrastructure, updating curricula to make them practical and relevant, linking education and skills with production and markets, and expanding investment in quality and inclusive education. However, many of these measures remain unimplemented in practice.