Child Education Planner
Key Takeaway
Education inflation in India averages 10-12%, significantly higher than general inflation. Start an equity SIP early to comfortably fund higher education costs.
Note: Higher education inflation in India is typically around 10-12% p.a., much higher than retail inflation.
Projected College Cost vs Current Savings Value
What to do next
Based on your Child Education Planner, here are the tools you should try next:
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Funding the Future
General inflation in India is around 6%, but education inflation is historically much higher, hovering around 10-12%. A medical or engineering degree that costs ₹15 Lakhs today will cost an unimaginable sum 15 years from now. If parents don't start aggressively investing in high-growth equity early on, they will be forced to take massive education loans later.
The ₹62 Lakh Degree: Rahul's Planning
Today, a premier MBA program costs roughly ₹20 Lakhs.
Rahul assumes education inflation will be 10% per year.
- Future Cost = ₹20,000,000 × (1.10)^18 = **₹1.11 Crores**.
A target of ₹1.11 Crores seems impossible to Rahul. But then he calculates the monthly SIP required to reach this target over 18 years, assuming a 12% return from a diversified equity mutual fund.
- Required Monthly SIP: **₹14,500**.
By starting when she is just 3 years old, Rahul only has to save ₹14,500 a month. If he waited until she was 13 (leaving only 8 years to save), he would have to save a staggering ₹71,000 a month to hit the same target. Time is the greatest asset parents have.
Engineering or Medicine in 2040? Here's What It Will Cost (It's a Lot)
In 2024, a private engineering college in India charges ₹3–6 lakh per year. A private medical college: ₹10–25 lakh per year. An MBA from a top institution: ₹25–35 lakh for the full program. These are today's numbers. Now add 10% education inflation per year for 15 years.
That ₹5 lakh/year engineering degree becomes ₹20.8 lakh/year by 2040. A 4-year program costs ₹83 lakhs in today's planning , not 20 lakhs. Most parents are planning for the wrong number because they're not accounting for education inflation.
The Child Education Planner calculates the inflation-adjusted corpus required for your child's education and the monthly SIP needed to reach it. The inputs: child's current age, expected education start age, current estimated cost, education inflation rate, and expected investment return.
For a 3-year-old whose education starts at 18: you have 15 years. At 10% education inflation and a ₹5 lakh/year current cost: you need ₹1.04 crore target corpus (4 years). At 12% SIP return, you need ₹18,500/month starting today. Starting 5 years late (child age 8), the same goal requires ₹42,000/month. Start early. The numbers are unforgiving.
Frequently Asked Questions
How much will college cost in 15 years?
At 10% education inflation, a course costing ₹10 Lakhs today will cost ₹42 Lakhs in 15 years. IIT/IIM fees have historically inflated at 10-12% annually. International education inflates even faster in INR terms.
When should I start saving for my child's education?
Start as early as possible , ideally from birth. A 15-18 year horizon allows you to invest aggressively in equity (70-80%) and benefit from compounding. Starting at age 10 gives you only 8 years, requiring much larger monthly investments.
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