Your Child's Dream College Will Cost - How Much?

Tuesday, June 09 2026
Source/Contribution by : NJ Publications

The number is bigger than you think. The time is shorter than you feel. And the cost of waiting is greater than most parents realise.

Every time parents speak about their children's future, their eyes light up. The dreams are vivid - IITs, IIMs, AIIMS, top colleges abroad. But ask them one simple question: "Have you sat down and actually calculated what that dream will cost?" - and the room goes quiet.

Most parents have not. And that silence can be very expensive - in more ways than one.

The cost of higher education in India is not just rising - it is compounding. Education inflation in India has consistently run around 10% annually, which is roughly double the general rate of inflation. That means every ten years, education costs are nearly three times what they were before. Not a little higher. Three times.

Source: MOSPI, Edufund research

Let us look at some hard numbers before we go any further.

^ Assumed today’s cost *Projected at 10% annual education inflation. For illustration only.

Read those projected figures again. Not as abstract numbers - but as the amount your child may need when they walk up to an admissions desk ten to fifteen years from now.

"These numbers can feel overwhelming. That is exactly where an NJ Wealth Partner steps in - not to sell a product, but to sit with you, understand your child's needs, your current savings, and the gap between where you are and where you need to be. The conversation starts with a number. The journey starts with a decision."

THE HIDDEN COST NO ONE TALKS ABOUT

The fee numbers above are alarming enough on their own. But there is a second problem hiding behind them - one that rarely comes up in conversations between parents, and almost never at the dinner table.

To pay for their children's education, most Indian parents are making a quiet, painful trade-off. They are not just taking on debt. They are silently dismantling their own retirement.

• 48% of the retirement savings depleted for a 3-year overseas degree

• 64% of the retirement savings depleted for a 4-year overseas degree

• 90% of the Indian parents intend to fully fund their child's education themselves

Source: HSBC Quality of Life Report 2024, surveying 11,230 affluent individuals across 11 markets globally.

These numbers come from a global HSBC survey - and India's figures are the highest of any country surveyed. Higher than China, Singapore, and the UK or the US. Indian parents are, by a wide margin, the most willing in the world to sacrifice their own financial security for their children's education.

That willingness is admirable. But the outcome, for many, is deeply painful.

The outstanding education loan book in India grew 39% in just two years - from ₹99,086 crore in March 2023 to ₹1,37,474 crore in March 2025. (Source: Parliamentary Standing Committee on Education, December 2025)

NBFC education loan AUM grew 77% in FY24 and another 48% in FY25. (Source: Crisil Ratings, March 2026)

THE REAL COST OF NOT PREPARING EARLY ENOUGH

It is not just the education loan that follows the child into their career. It is the retirement the parent quietly gave up to make it possible. The solution is not to choose between your child's education and your own retirement. The solution is to start early enough - and grow your investment every year - so you never have to make that choice.

"Education loans are not a solution. They are what happens when there is no preparation."

WHAT YOU SHOULD BE DOING - BASED ON YOUR CHILD'S AGE TODAY

Age 0 - 5: Time is your only real advantage. Use it.

If your child is under five, you are in the most powerful position any parent can be in - not because you have money, but because you have time. A SIP of ₹5,000 per month started today can build a meaningful corpus by the time your child turns 18. The amount matters less than the start. Begin now, step up every year as your income grows, and let compounding do the heavy lifting.

Age 6 - 10: Review what you started. Is it still enough?

Many parents started an SIP when their child was born - perhaps ₹2,000 or ₹3,000 a month. That was a good beginning. But fees have climbed since then, and so has your income. Is the corpus you are building keeping pace with the education costs you are targeting? If not, step up your SIP. A small top-up now makes an enormous difference a decade later.

Age 11 - 15: Shift from growth to balance. The need is getting closer.

With seven years or fewer remaining, it is time to think about protecting what you have built. Gradually moving a portion of the corpus from pure equity to a more balanced allocation helps reduce the risk of a market correction at the worst possible time. Continue your SIP, but begin a gradual shift in strategy. Assess your corpus honestly against the projected cost. If there is a gap, address it now.

Age 16 - 18: The last lap. Protect, consolidate, and be ready.

The need is now two to three years away. Know exactly what your target corpus is, what you have, and what the gap looks like. If there is a shortfall, an education loan as a top-up is acceptable-but it should supplement a corpus, not replace one. And critically - do not let this shortfall force you to touch your retirement savings. Speak to your MF distributor and assess your position clearly before making any decision.

Every parent wants their child to have choices. The freedom to pursue medicine if that is the calling, engineering if that is the passion, or management if that is the ambition - without financial constraints forcing a compromise.

But there is something equally important that often goes unsaid. Every parent also deserves a retirement that does not depend on their child's salary ands to reach their sixties without having quietly sacrificed everything for a dream they could have prepared for - had they simply started earlier.

The good news is this: with time on your side and a disciplined, growing SIP, you do not have to choose. Your child's education corpus and your own retirement can both be built - simultaneously - if you begin early enough and stay consistent.

The best time to start was the day your child was born. The second best time is today. Speak to your MF distributor, assess where you stand, and put a number to the dream. Once you see it clearly - the path forward becomes surprisingly straightforward.

Your child's dream college is not out of reach. But it does need a head start

Disclaimer: Mutual Fund investments are subject to market risks, read all scheme related documents carefully. Education fee projections are at 10% annual inflation and are for illustrative purposes only - actual costs may vary. Retirement savings depletion data: HSBC Quality of Life Report 2024. Education loan data: Parliamentary Standing Committee Report, December 2025 & Crisil Ratings, March 2026.