Parents often plan for their child’s education using today’s fees as a reference point — an engineering degree costs roughly X lakhs today, so they aim to save X lakhs. The problem is that education costs in India have risen faster than general inflation for years, which means the actual amount needed by the time a child reaches college age can be two to three times what it costs today.
Why Education Costs Outpace General Inflation
General consumer inflation in India has typically run in the 5-6% range in recent years, but education costs — particularly for professional courses, private schooling, and study-abroad programs — have often grown at 8-10% annually or more. This is driven by rising infrastructure and faculty costs, growing demand for quality institutions relative to available seats, and currency depreciation for anyone planning an international education, since fees are usually paid in foreign currency while savings accumulate in rupees.
What This Means in Real Numbers
At 9% annual education inflation, a course that costs ₹20 lakh today will cost roughly ₹61 lakh in 13 years — more than triple, even though it feels like “the same course.” Parents who save based on today’s cost, without adjusting for this compounding effect, routinely fall short by lakhs of rupees right when the bill actually comes due, simply because they under-projected the target.
Start With the Future Cost, Not Today’s Cost
The right approach is to estimate today’s cost of the goal, inflate it forward to the year your child will actually need the money using a realistic education-inflation rate, and then work out the monthly SIP required to close that inflated gap — not the gap based on today’s price tag. This single adjustment is often the difference between a fully funded goal and a painful shortfall that forces a loan or a compromise on which institution your child attends.
Starting Early Matters Even More Here
Because education costs compound at a higher rate than most other goals, the cost of delaying is proportionally larger too. A SIP started when a child is born has 18 years to work with; the same goal started when a child turns 10 has only 8 years, which usually requires a monthly investment several times larger to reach the same inflated target. Time is the one input in this calculation you can’t make up for later.
Calculate Your Child’s Actual Future Cost
Rather than guessing, our Child Education Goal calculator inflates today’s cost forward to the year your child will need it and tells you exactly what monthly SIP is required to fund it — with a downloadable PDF summary you can revisit each year.