The Cost Of A Career: Strategies For Parents To Support Child’s Education

Manish Arora, 46, a businessman based in Punjabi Bagh, Delhi, first started investing for his daughter Adya, now 18, when she was eight years old. Manish always wanted to send his daughter abroad for higher education.

That clarity helped him start planning early and save consistently to meet the goal. The family’s persistence and Manish’s organised approach paid off. Adya was able to join the University of Illinois, Chicago, the US, in September 2023 to pursue an undergraduate programme in psychology despite the steep cost that an international education entails.

Today, more and more students are opting for higher education. According to the All India Survey on Higher Education (AISHE) 2020-2021 released by the Ministry of Education, “The total enrollment in higher education has increased to nearly 4.14 crore in 2020-21 from 3.85 crore in 2019-20.  Since 2014-15, there has been an increase of around 72 lakh in the enrolment (21 per cent).”

Some of these stick to the engineering, medical and management courses in India, which remain among the favourites even now, while many others are choosing newer career options, and still others, like Adya, are choosing to study abroad in varied fields.

Most parents in India aspire to provide the best possible education to their children, but turning that dream into reality is not easy if they are not as well prepared like Manish was.

We explore the burst of new career options that your children might like to choose from, give you an idea about the explosion in the cost of education, and list strategies that can help your children realise their dreams and ambitions.

Wider Career Options

New-age careers, from technology management to sustainable architecture, finance, data analytics, business economics, cognitive sciences, marine, and psychology to gender studies, have become all the rage. Moreover, with new technology and artificial intelligence (AI) becoming entrenched with everyday lives, several new career options are emerging and are expected to become mainstream in the future.

“Careers in game designing, augmented reality (AR) and virtual reality (VR) are gaining popularity. In fact, a whole lot of career options related to social media, such as YouTube and Instagram influencers and video editing are on the rise,” says Shirish Gupta, TEDx speaker and founder of Mnemonic Education & Overseas Admissions, Delhi.

Fields like prompt engineering, AI, quantum computing, biotechnology, etc., are creating new job avenues. There is also growing inclination towards data science, sustainability, and renewable energy. Also, content creation and gaming have witnessed unprecedented popularity among the next-gen.

Neeti Sharma, co-founder and president of TeamLease Edtech, an education and employability solution provider based in Bengaluru, cites some research to give a clearer picture. She says: “Eighty-five per cent of jobs in the next 10 years haven’t been invented yet. This indicates a constant shift from traditional jobs. Also, eventually, there will be no job which is not integrated with technology. Whether retail or e-commerce, AI plays a huge role.”

That doesn’t mean, however, that traditional options will go out of the window as they still have relevance.

Charushilla Narula Bajpai, founder director and key mentor at University Connection, a Delhi-based career and college planning education consultancy for admissions abroad, says, “Some students continue to hold on to the safety nets of an engineering or medicine degree. That’s also because they select a career not to make a life but a living. But it should not be mutually exclusive.”

While we will need engineers, doctors, researchers, historians or managers even in the future, automation and AI threaten some jobs, especially those that are repetitive and manual in nature. For instance, jobs like logo or graphic designing are increasingly being automated. Jobs like translators and telemarketers are also increasingly being replaced by AI. Gupta advises parents to encourage their children to adapt, learn, and focus on skills that machines can’t replicate easily, such as creativity, empathy, and critical thinking. “Regular dialogues about emerging fields can provide clarity, like joining a community or following people on social media who talk about these changes like we try to educate parents on our platforms,” he says.

Parents are also considering helping their children pursue studies abroad in new as well as traditional fields as they believe it helps the child’s holistic development and gives them more exposure to real-life situations.

“We wanted our daughter’s varied interests and acumen to be celebrated at college and felt that an international experience at a liberal arts school would be ideal. Recently, she was on the Dean’s List, and we can see her grow holistically,” says Charushilla, whose daughter Nandini, 21 is pursuing a major in psychology at Marist College in New York, the US, since 2021. She also aims to complete a minor in criminal justice along with that.

Charushilla adds: “Rote learning combined with pressure and competition among students in India not only hinders critical thinking, but also the creativity of students, especially in high-stress situations. The emphasis on theoretical over vocational knowledge leaves many students unprepared for real-world challenges here.”

Soaring Costs

Helping your child choose the right career option is only the first battle won. The bigger challenge is to fund the courses given that the cost of education has gone through the roof in the past decade.

Several factors, such as inflation, increased demand for specialised courses, higher cost of infrastructure development, technology integrations, focus on extra-curricular activities, which require additional facilities, etc., have led to an increase in the cost of education both in Indian as well as foreign universities.

Bhuvanaa Shreeram, co-founder and head of financial planning at House of Alpha, says, “MBA courses, once costing around Rs 2 lakh annually, now exceed Rs 5 lakh.”

Says Charushilla: The current fees at IIMs can range from Rs 17 lakh to Rs 24 lakh; it used to be around Rs 6 lakh at some point. Likewise, fees for the complete course at IITs cost Rs 6 lakh to Rs 10 lakh now, a three-fold increase from earlier times.”

To put things in perspective, the fees at both these premier Indian institutes have risen by more than 100 per cent.

The scenario for foreign education is similar, although experts say that the bulk of the hike is due to the higher dollar conversion rate. “About a decade ago, the fee for foreign education was Rs 25-30 lakh per year, and now it is about Rs 40-50 lakh per year and upwards,” says Gupta.

Charushilla adds that a US undergraduate programme used to cost over Rs 1 crore a decade ago. Today, it has doubled for the same programmes, not just because of an increase in tuition fees, but due to the overall increase in living expenses from $15,000 to $20,000 per month.

The silver lining in foreign education is that colleges and universities in the US and other destinations offer scholarships, which are sometimes up to 100 per cent. But to avail of these, typically, students need to work on their profiles for at least two-three years before admission (See Things To Keep In Mind).

“For new-age career options, the fees again depend on the university and the course, but generally, it is in the range of Rs 5-10 lakh per year. For example, a bachelor’s degree in UI/UX (user experience/user interface) designer at Pearl Academy (Delhi) costs approximately Rs 7 lakh per year,” says Gupta.

Associated Costs: The tuition fee is only one part of the costs you will need to bear. With the current education system in India, parents often have to shell out extra for the overall development of children’s personalities and upskilling. Says Gupta, “Education in India is improving, but still needs a lot of work. The three big challenges I see are the outdated curriculum, rote learning, and escalating competition. Students are still learning things that their parents learned. Due to this, parents have to spend a lot on parallel education like skill-building, personality development and more.”

Another set of associated costs to keep in mind is the cost of living, if your child is seeking admission in a city or country where you are not based. This cost may spiral if you are sending your child abroad. “We tend to overlook expenses for private accommodation, food, utensils, laundry, internet and mobile,” says Manish. For his daughter Adya, he ensured he took all that into account as the living costs are much higher in the US than in India.

“To get a ballpark figure, one must consider variables such as living and travelling expenses, utilities, healthcare, and other miscellaneous expenses,” says Arijit Sen, a Securities and Exchange Board of India (Sebi)-registered investment advisor and co-founder of Merry Mind, a Kolkata-based financial advisory firm.

Scary Projections

Given that historically costs have soared more than 100 per cent in the past decade, experts project similar increases in the future.

Says Sharma: “The price will likely increase at the same rate over the next decade. With gross domestic product (GDP) growing at 6 per cent, aligning to an average increase of household income, and if education costs go up by even 10 per cent, families are bound to feel the heat—not just in fees, but also in the cost of student loans.”

But she is optimistic that with the rise in online education and alternative learning options, there will be scope for savings in travel, stay, etc. It also means that parents must invest more in technology.

According to Sen, if the cost to obtain an engineering degree from a reputed college in India was around Rs 3 lakh 15 years ago, it costs around Rs 12-15 lakh today and is likely to go up to Rs 40 lakh in another 10 years, assuming an education inflation of 10-12 per cent per annum. “Similarly, if an MBBS degree from a private college costs Rs 1 crore today, one must be prepared to spend around Rs 3 crore 10 years from now,” he says.

For an MBA degree, if the cost is around Rs 5 lakh per annum now, parents might need to shell out around Rs 20-25 lakh per annum 10 years later, and this calculation doesn’t even account for living expenses, books, and additional resources, adds Shreeram (See How Much Money You Will Need For Your Child’s Higher Education).

Gupta gives an overall idea. “If the past trend is any indication, prices could double or even triple in the next decade, with premier institutions potentially charging Rs 15-25 lakh per annum,” he says.

If you are looking to send your child abroad for studies, the cost could be daunting.

Strategies For Parents

The rising cost implies that planning ahead for your child’s education goal is critical. For a lot of people, it could take years of disciplined investing to achieve this goal. Here is a guide that can help you navigate this journey.

Zero Down On The Course: Parents should focus on the holistic development of their children, incorporating academic and extra-curricular activities. They should research the desired countries or universities to help streamline the process at least one-two years before college starts, says Gupta.

In case of foreign education, parents and students will require an understanding of different educational systems, application processes, and cultural nuances, besides finances. Challenges such as securing visas, adjusting to diverse teaching methodologies, and homesickness will also arise; hence, they will require professional help navigating through them.  

Estimate The Costs: The projections given above should give you a rough idea about how much you will need. Also, many professional organisations help provide a holistic view of the overall costs of programmes, from tuition cost, living expenses, and travel to other related costs. They also enumerate the scholarship options for students to help parents estimate the required budget and enable them to select institutions as per their choice of course and financial ability.

Sen adds that the cost depends on the course selected. “One genuine concern parents face while planning for children’s future is that they don’t know which streams their children will choose. Thus, at times they feel clueless while preparing for their children’s future, where the corpus required may vary. But, one aspect that is more or less definite is the time horizon,” he says.

Another factor to consider is the cost of other things, such as accommodation, commute, etc. When Manish was saving for Adya, he ensured he factored in the future cost of accommodation, clothes, travel, local trips, etc.

Start Early: Once you know how much you will need, start saving systematically. You could consult a financial advisor who can provide tailored solutions if you are unable to do it yourself.

The earlier you start, the better it will be. Abhijit Talukdar, a Sebi-registered investment adviser and founder of Attainix Consulting, says that for long-term goals like higher education and marriage, parents should start investing early so that they can invest small amounts every month to achieve them. “Planning for big expenses should start early to reduce strain on the monthly budget, as expenses like school education will need to be met with monthly income,” he says.

Thanks to an early start and a well-timed roadmap, Manish had to save small amounts consistently to reach the goal. This ensured that his household budget never came under pressure. That way, he was not only able to accumulate the necessary funds for Adya’s education with relative ease, but never had to sacrifice the family’s lifestyle.

Manish started investing in exchange-traded funds (ETFs) around 10 years ago with the specific goal of funding Adya’s education. He says: “I went only with safer options like Nifty and Nifty Junior. The intention was to arrange funds in a manner that Rs 50 lakh is available every year for four years for Adya’s education. I reverse-iterated the calculation, which gave me a ballpark figure of the number of years and the amount to be invested each month. For assurance, I calculated the return on investment at the lowest value, even though I knew I could have made better returns.”

Diversify Your Investments: Shreeram advises that one should not put all eggs in one basket. She adds: “Mutual funds, fixed deposits, Public Provident Fund (PPF), and bonds are all viable options. Keep abreast of the changing education landscape in terms of quality and cost. Professional help from counsellors will help optimise costs and avoid wastage.”

Talukdar advises that parents could also benefit from government schemes, such as Sukanya Samriddhi Yojana (SSY) meant for girl children, UDAAN CBSE scholarship programme, and the National Scheme of Incentive to Girls for Secondary Education.

Get A Cover: You would not want to derail your child’s education in case anything were to happen to you, which is why you must take life insurance that also covers the cost of education. “The last thing a parent wants is to give up on their child’s education dreams due to unfortunate events,” says Shreeram.

Another aspect to keep in mind is to not let any medical emergency derail the savings. For that, Talukdar advises parents to add their children to their family floater health insurance policies, or purchase individual health coverage for them. Premiums for such policies are relatively low because children are less prone to severe diseases.

Although Adya’s university provides medical insurance, Manish bought an individual insurance plan for her to ensure cashless treatment in times of need.

The path to realising parents’ dream to make their child self-sufficient and independent is daunting. However, a little foresight and systematic approach can go a long way in building an education fund brick by brick.

By Sanjeeb Baruah and Meghna Maiti

sanjeeb@outlookindia.com, meghna@outlookindia.com