Students from Tamil Nadu, the top borrowers of educational loans in India, have seen a steep fall in their active loan accounts. Between FY16 and FY25, active accounts in Tamil Nadu dropped from 9.1 lakh to just 3.1 lakh. This sharp decline largely drives the national fall from 27.4 lakh to 20.1 lakh active educational loan accounts. Tamil Nadu held 30-35% of India’s education loans from FY16 to FY20. Other states like Kerala, Maharashtra, and Karnataka trailed behind. Despite the drop, Tamil Nadu still accounts for 15% of active loans nationwide, the highest share among states. Excluding Tamil Nadu, the rest of India's educational loan accounts stayed stable over the years. The decline started from FY16 and is not only due to the pandemic. Experts wonder if this drop signals tougher access to loans or a correction after years of easy lending. Interestingly, while loan accounts fell, the total amount outstanding rose. Outstanding loans doubled from ₹55,000 crore to over ₹1,15,500 crore between FY16 and FY25. Loan per borrower jumped from ₹3 lakh to ₹6 lakh, showing fewer students borrow but take larger amounts. A December 2025 parliamentary committee report said this trend indicates reduced loan availability even as education costs grow. It called for efforts to help more students access loans, especially those from Below Poverty Line families. The data comes from a Right to Information reply by The Hindu with RBI, published January 13, 2026.