How to pay foreign university tuition from Nepal, the legal way (SWIFT/TT)

A father stood at a bank counter in New Road last Asar with his daughter's I-20 in a plastic folder, USD 18,000 of first-semester tuition to send to a university in Texas. A consultancy "facilitator" had offered to do the whole thing in two days at a rate better than the bank's, no NOC paperwork, just hand over the cash. The bank's relationship officer told him the honest version: that route is hundi, it is a crime, and if the money never reaches the university there is no one to complain to.

He did it through the bank. It took longer and cost a bit more on paper. The payment landed in the university's account with a reference number he could track. That tracking number is the whole point.

The two gates before any money moves

Two government gates sit in front of every tuition transfer. Both are covered in depth in the 12-month study-abroad runway; here is the short form, because the payment can't start until both are clear.

Gate 1 — the No Objection Certificate (NOC). The Ministry of Education, Science and Technology issues it from its branch at Sanothimi, Bhaktapur. Apply online at noc.moest.gov.np. The fee is Rs 2,000 and it is normally issued in 1–5 working days. The NOC is tied to one institution: a bank cannot send money to any university other than the one named on it, so a change of college means cancelling the old NOC and getting a new one. Since the 2023 rule change, NOCs are issued only for university-level study, not for language courses, diplomas, or institutions off the Ministry's list.

Gate 2 — the NRB foreign-exchange facility. Nepal Rastra Bank caps how much foreign currency a bank can release per student per year. The October 2024 circular (New Business Age) raised the limit for tuition, affiliation, and examination fees from USD 12,000 to USD 25,000. Living expenses sit under a separate, country-wise schedule.

Destination	Annual living-expense limit
USA, Australia, Canada, Europe	USD 12,000
Singapore, South Korea	USD 6,000
China, Malaysia, Thailand, Philippines	USD 4,000
Bangladesh, Pakistan	USD 2,500
Other countries	USD 5,000

The three legal ways to send tuition

Once both gates are clear, three channels can actually move the fee. They are not interchangeable; the right one depends on the university.

Channel	How it works	Typical cost on top of FX	Speed	Best for
SWIFT / TT wire	Bank wires the fee to the university's bank account using its SWIFT code	SWIFT fee ~Rs 1,000 + 0.075–0.15% commission + any correspondent-bank deduction abroad	2–5 business days	Any university that gives you bank + SWIFT details
Flywire (via NMB Bank)	You pay in rupees; Flywire converts and pays the school	Margin built into the FX rate, no separate SWIFT fee	2–3 business days	The 1,700+ institutions on Flywire's network
Foreign-currency demand draft	Bank issues a paper draft made out to the university	Draft issuance + SWIFT advice fee	Depends on courier time	Schools that still want a physical instrument

A note on Flywire: NMB Bank is the bank in Nepal that processes Flywire payments, covering universities across the US, Canada, Australia, and elsewhere (NMB Bank). You can fund it from any Nepali bank account. The pitch is a cleaner rate and a payment the school recognises in its own portal, which removes the "we can't find your wire" problem that sometimes hits raw SWIFT transfers. A demand draft, by contrast, is the old-school option; some banks like Nabil still offer drafts and international prepaid cards alongside SWIFT for student use.

What you cannot do: pay a full tuition bill on a Nepali debit or credit card. Card spending sits under separate, far smaller NRB caps. Cards and prepaid forex cards are for living expenses and small fees, not the semester invoice.

What it actually costs

The wire fee is the part everyone worries about, and it is the part that barely matters. Rastriya Banijya Bank, a state-owned bank that publishes its SWIFT charges openly, is a useful benchmark:

Item	With visa	Without visa
SWIFT charge	Rs 1,000	Rs 1,000
Commission	0.075%, min Rs 250	0.15%, min Rs 1,500

On a USD 10,000 tuition transfer, that commission is about Rs 1,050. Add the SWIFT fee and you are near Rs 2,000 in bank charges on a transfer worth roughly Rs 14 lakh. Other banks levy similar amounts; SBI Nepal's schedule references around Rs 400 per SWIFT message, and some banks add a small handling charge in the destination currency.

The real cost is the 3% education service fee. It applies to the whole foreign-currency amount you take out for study abroad, tuition and living expenses both (Edusanjal). The rate climbed from 1% to 2% to 3% in the FY 2080/81 budget and has stayed at 3% since. On USD 10,000 that is USD 300, about Rs 42,000. The bank collects it at the counter when it releases the forex. One piece of good news: it is refundable through the Inland Revenue Department if the student doesn't go, which matters when a visa is refused after the fee is already paid.

So on a USD 10,000 semester payment, the cost stack looks like this:

Tuition (USD 10,000 at ~Rs 140/USD)   ≈ Rs 14,00,000
3% education service fee               ≈ Rs   42,000
SWIFT fee + commission (with visa)     ≈ Rs    2,050
Correspondent bank fee abroad          varies, deducted from the amount
─────────
The 3% levy is roughly 95% of the "extra" cost.

The lesson: stop optimising the Rs 2,000 wire fee. The 3% government levy and the exchange rate are where the money is.

The exchange-rate margin nobody mentions

NRB publishes a daily reference rate, but that is not the rate you get. For an outward tuition wire the bank applies its telegraphic transfer (TT) selling rate, which carries a margin over the reference rate. The counter rate will not match the chart on nrb.org.np.

On a USD 25,000 year, even a small per-dollar margin adds up to real money, so it is worth asking two banks for their TT selling rate on the day rather than assuming they are identical. This is also why timing matters: a rupee that weakens against the dollar between your NOC and your transfer date raises the bill, the same FX risk that hits anyone earning in USD, running in reverse.

The document set the bank asks for

Banks ask for broadly the same papers. Rastriya Banijya Bank lists them for student transfers, and most banks match it:

• NOC (original) from the Ministry of Education
• Offer or admission letter — I-20 (US), CAS (UK), CoE (Australia), LOA (Canada)
• Passport copy
• Proof of funds / source of income — bank statements, sponsor or scholarship letter
• The university invoice showing the fee due and the institution's bank name, account number, and SWIFT code
• The bank's own SWIFT funds-transfer request form

Get the invoice detail right. A wrong SWIFT code or account number is the single most common reason a tuition wire goes astray, and recalling a SWIFT payment is slow and sometimes costs another fee. Photograph the university's payment instructions and have the bank officer read them back before signing.

On proof of funds: banks want to see where the money came from, and a clean income trail helps. There is no separate income-tax-clearance requirement specific to tuition beyond the standard documents, but parents funding a large transfer from business income are smoother through the process when their tax filings are in order.

Why hundi looks cheaper, and why you don't use it

Hundi agents and some consultancies offer a better rate, no NOC, and same-day delivery. The rate is better because the transaction is illegal and the agent skips the 3% levy. That is the entire saving, and it is not yours to keep.

Under the Foreign Exchange (Regulation) Act and Section 96 of the NRB Act, an unauthorised forex transaction can draw a fine of up to three times the amount, imprisonment up to three years, and confiscation of the money involved. Hundi is also now explicitly criminalised under the Muluki Criminal Code. The full comparison of cost and risk is in the hundi vs bank remittance post; for tuition specifically, three practical risks stand out:

• No trace. A bank wire has a reference number and a SWIFT trail. If the school says it never arrived, the bank can investigate. A hundi payment that vanishes has no paper, no recourse, no one to call.
• The university wants a clean source. Many schools, and the visa process behind them, expect tuition to arrive through formal banking channels. A cash deposit from an unknown third party can raise questions you don't want during a visa interview.
• The saving is a rounding error against the stakes. Skipping the 3% on USD 10,000 saves about Rs 42,000. Risking a criminal case and a child's admission to save that is a bad trade.

This is also why money leaving Nepal for education runs into the hundreds of billions through the legal channel: Rs 138.48 billion flowed out for foreign study in FY 2081/82, and roughly Rs 493 billion over seven years, with 543,833 students taking NOCs (Kathmandu Post, myRepublica). The banking system handles this volume routinely. There is no reason to step outside it.

A worked example: one US semester

Riya's daughter has an I-20 from a public university in the US. Semester tuition due: USD 12,500. She already holds the NOC and a student visa.

Tuition invoice:                 USD 12,500
TT selling rate (illustrative):  Rs 140 / USD
Rupee value of tuition:        ≈ Rs 17,50,000

3% education service fee:        USD 375  ≈ Rs 52,500
SWIFT fee:                       Rs 1,000
Commission (0.075%, with visa):  ≈ Rs 1,310
─────────
Total leaving the account:     ≈ Rs 18,04,810
(plus any correspondent-bank deduction abroad, taken from the USD)

Two things to read off this. First, the 3% fee (Rs 52,500) is forty times the bank's wire charges. Second, this single transfer of USD 12,500 sits inside the USD 25,000 annual tuition facility, so a second semester later in the year is also within the limit. (Rates here are illustrative; the bank's TT selling rate on the day decides the rupee figure.)

If the visa had been refused before the transfer, the 3% would be reclaimable from the IRD. If a top-tier private school pushed the year past USD 25,000, the gap would need an education loan or funds shown as visa support rather than transferred.

What you actually need to know

• The NOC plus a bank SWIFT/TT wire is the whole legal path. Flywire via NMB Bank is the smoother variant for schools on its network. Cards and drafts are for the edges, not the main tuition bill.
• Budget the 3% education service fee, not the wire fee. On a USD 25,000 year that levy is about Rs 1 lakh; the bank's SWIFT charges are a few thousand rupees. The exchange-rate margin is the other cost worth shopping between banks.
• Hundi saves the 3% and risks a criminal case, a lost payment, and an admission. A traceable bank reference number is worth far more than the saving.

Got a specific country, university, or transfer size you want the math run on? Email parjanya57@gmail.com.

This post is part of the Nepal Money Basics guide — the big-ticket-decisions section.