Your child may want to become a chef, an athlete, a filmmaker, an engineer, a doctor, or may want to pursue a career of his or her choice. As a parent, you would want to provide the best education to your child. With the rising cost of education in India, you would need a substantial amount to be able to provide the desired education to your child.

Below are a few examples to understand this better:

Let us say that your child has started education now.

In order to pursue an Engineering degree from a premier institute in India, your child would require ₹ 4 lakh per year as on today¹. For the four-year degree course, that would amount to ₹ 16 lakh.

Assuming a 6% rate of inflation in the cost of education over the next 15 years, the same would cost approximately ₹ 10 lakh per year, which would amount to ₹ 40 lakh for the four-year degree course.

Similarly, the approximate cost of pursuing a medical degree in a premier institute in India, today is approximately ₹ 10 lakh per year². This would mean the total cost of pursuing the degree over five years would amount to ₹ 50 lakh.

Assuming the same 6% rate of inflation in the cost of education, the same would cost a total of ₹ 1.2 crore after 15 years.

Please note that the above calculation does not include primary and secondary education costs and other expenses.

Factors to consider while estimating the cost for your child’s education

• Tuition fee:

  This is the most basic of fees required for any education. This will vary depending on the type of course, university and more. For example, primary and secondary school fees can range approximately between ₹ 30,000/- to over ₹ 10 lakh per year³. Tuition fees for MBA can range approximately between ₹ 20,000/- to ₹ 25 lakh per year⁴

• Accommodation:

  Students who get admitted to colleges far away from home typically require accommodation close to their place of study. This brings in an additional cost

• Other expenses:

  Beyond the usual tuition fee and accommodation, there are many other costs that you will have to incur during your child’s education. These costs include expenses towards books, utilities, cost of materials, food, transportation, and more

Reasons for the Rise in Cost of Education in India

Inflation

As the prices of goods and services rise, so does the cost of education in India. This rise impacts school fees, tuition fees, the cost of books, uniforms and more, making education less affordable.

Infrastructure Development

Modern educational institutions with advanced facilities like amphitheatres, indoor and outdoor sports complexes and state-of-the-art campuses. While these enhance the quality of education, they result in higher fees, thus increasing the cost of education.

Technological Advancement

Technological advancements in the education system, like smart classrooms, online learning tools and other tech-driven changes have added to the education cost in India. While these upgrades enhance the learning experiences, it also is an additional expense to schools which they simply pass onto you, making education more expensive.

Education Privatisation

With more private institutions entering the education sector, school and college fees are often unregulated.! This is leading to high fees compared to government institutions

Globalisation

Global trends in education, like international curriculums and higher academic standards, push Indian educational institutions to upgrade their facilities. However, the desire to stay competitive is further driving up education costs in India.

How to Manage the Rising Cost of Education in India?

Start Early

Starting early gives you more time to save for your child’s education. With a longer horizon, you can gradually accumulate funds for your child’s education while balancing other financial goals.

Government Education Loans

Government-backed education loans come with favourable terms such as lower interest rates, flexible repayment options and longer repayment terms, making them a good option for you. These options provide funds for you to cover your child’s education expenses.

Scholarships and Financial Aid

Many schools and colleges offer scholarships for academic excellence, sports achievements or cultural accomplishments. These scholarships can help reduce the cost of their education.

Online learning platforms

Online platforms offer a cost-effective and flexible alternative to traditional coaching classes. The online learning platforms eliminate commuting costs and offer more flexibility. For children up to certain grades, they can use online learning platforms as an alternative to coaching classes.

Internships with Stipends

Your child can consider taking up internships during vacations. The stipends earned can contribute to cover their education expenses and provide valuable work experience.

Saving and Investments Plans

You can evaluate savings and investment plans like Unit-Linked Insurance Plans (ULIPs) and child-specific savings plans. These options allow you to build an education fund over time and combat the effects of inflation, ensuring you are financially prepared for future education expenses.

Here’s How Child Insurance Plans Can Help You Manage the Costs of Education in India

The cost of education in India@ is rising rapidly. Hence, it is important for you to plan according to your child’s goals and be financially prepared for their education expenses.

• Financial Security:

  Child insurance plans can help secure your child’s future education expenses. These plans offer returns that help beat inflation and offer you the peace of mind.

• Goal-Based Savings:

  Child insurance plans make it easier for you to save for your child’s education. These help you build a fund to achieve goals. These goals may include pursuing higher education, professional courses, specialised skill certifications, preparing for competitive exams or studying abroad.

• Life cover^{^}:

  In case of an unfortunate event during the policy term, a child plan provides a lump sum amount that can help fulfil your child’s dreams

• Inflation Protection

  Child insurance plans are designed to deliver returns that beat inflation. These help protect the value of your savings over time. This ensures you can adequately build the fund for your child’s education when required.

• Waiver of premium benefit:

  In case of an unfortunate event during the policy term, the company waives off all future premiums payments. This keeps the policy active till the policy term and provides the maturity benefits to your child

• Partial withdrawals:

  You can withdraw a portion of the amount you have invested during the policy term in the form of partial withdrawals. This option helps you take care of your child’s educational milestones and other expenses

• Tax^* benefits:

  A child plan offers tax benefits for the premiums paid towards the plan under Section 80C of The Income Tax Act, 1961. The payouts received from the plan are also tax-free^* as per Section 10(10D)^*

Levels of Education in India

Below are the different levels of education in India:

Pre-Primary Education: 3 to 4 years

Pre-primary education in India includes preschool years, where children learn foundational skills. This education focuses on introducing basic concepts like alphabets, numbers, shapes, colours. This creates curiosity in the young minds.

Primary Education: 8 years (Classes 1 to 8)

Primary education includes classes 1 to 8 focusing on core academic subjects. These subjects include mathematics, science, languages and more. Additionally, this education helps students to discover interests in sports, arts through extracurricular activities.

Secondary Education: 2 years (Classes 9 and 10)

Secondary education focuses on providing students with a deeper understanding of different subjects like mathematics, science, humanities and more. Students prepare for their boards, which is their first academic milestone. This enables them to identify their interests and explore career opportunities.

Higher Secondary (Senior Secondary) Education: 2 years (Classes 11 and 12)

In higher secondary education, students have an option to choose from streams like arts, commerce or science. This education also offers vocational courses, providing practical skills for specific industries like IT, healthcare, hospitality and more. This helps them to align with their desired career paths.

Under-Graduate (Bachelor's Degree) Education: 3 to 4 years, depending on the subject

Under-Graduate programs offer in-depth professional education in fields like arts, commerce, science and engineering. It can last for 3 to 4 years, depending on the course of study. Students can also pursue professional courses like Chartered Accountancy (CA), Company Secretary (CS), or Law, preparing them for specialised careers.

Postgraduate Education: Typically, 2 years, can vary depending on the course

Postgraduate studies focuses on advanced learning in a specialised field. It usually last for 2 years. This offers expertise in a specific area of study. It enhances career opportunities for research and academic roles as well.

Conclusion

Your child’s goals may change with age. As a parent, it is best to stay prepared financially, always. A child plan offers dual benefit of protection as well as growth of your money to ensure a secured future for your child.

People like you also read ...