The Soaring Cost of Education: Why Starting Early Is Non-Negotiable
By Akhil Chugh
Date Aug 24, 2025
Education is often called the best investment you can make—but it’s also becoming one of the most expensive. Over the past decade, education costs worldwide have consistently outpaced general inflation, placing a significant financial burden on families. In India, this trend is particularly pronounced, with education inflation ranging between 8–12% annually, far higher than the 4–6% general inflation rate.
For instance, consider the fees for a PGP course at IIM Ahmedabad, which stood at Rs 11.5 lakhs in 2008 and has now soared to Rs 26.5 lakhs. Similarly, the fees for an IIT B.Tech program amounted to Rs 2.28 lakhs in 2008 but has escalated to Rs 10 lakhs today.
For students aiming to pursue education in foreign universities, the costs are nearly four times higher, excluding additional expenses such as accommodation and travel.
This isn’t just a short-term spike—it’s a long-term trajectory that will continue to reshape how families plan for their children’s futures.
Understanding Rising Cost of Education:
The cost of education is increasing at a fast pace. To estimate the size of the investment corpus required, let’s look at the cost of some popular courses in India at top institutes and assess their future cost 15 years from now (i.e. by 2040), assuming inflation at 8% p.a.
Such projections indicate one clear reality: the longer you wait to plan, the more unattainable these goals become.
How Early Planning Can Help?
When it comes to funding your child’s education, time is your biggest ally. Starting early doesn’t just reduce financial pressure—it transforms the entire experience from stressful to empowering.
- The Power of Small, Consistent Investments:
Starting early allows you to put time and compounding to work for you. Compounding means your returns earn returns over time, creating exponential growth. For instance, if you invest around ₹30,000 a month for 15 years at a 12% CAGR, you’ll accumulate over ₹1.5 cr. But if you delay by just 5 years and invest for only 10 years, you’d need to invest ₹65,000 a month to reach the same target. Let’s look at the below illustration to understand how an early start can make a difference to the total corpus:
Child: Meera
Current age – 5 years
Education Goal – MBA after 15 years
Current cost of MBA – Rs 30 lakhs
Growth in Education cost – 8% p.a
Future cost of MBA – Rs 1crore after 15 years
Assuming the CAGR of 12% over the investment period, the required SIP amounts to achieve the desired corpus of Rs 1 crore in 15 years will vary significantly depending on how early you start your SIPs.
As is evident from the table above, you may have to shell out almost double the money per month if you delay saving for your child education by just five years. So, it makes a lot of sense for you to start saving for your child future early.
- Beating Inflation, Not Fighting It
Education costs are rising at 8–12% annually. Starting early gives your investments the time to grow at a rate that outpaces inflation, ensuring your savings don’t lose value over the years.
- More Choices, Less Compromise
Planning in advance means you can afford to choose the right institution for your child’s aspirations—be it a top engineering college in India or a master’s program abroad—without worrying about last-minute finances or heavy borrowing.
- Peace of Mind for the Whole Family
Perhaps the biggest benefit of early planning is reduced stress. Knowing that you are financially prepared lets you focus on supporting your child emotionally and academically, rather than worrying about how to pay the next fee instalment.
Net Brokers Takeaways:
- Consider a Higher Inflation Rate. To safeguard your child’s future, it’s wise to plan for a higher level of inflation, ideally in the range of 7% to 10%. Avoid assuming lower inflation rates that may not reflect reality.
- Start your child’s education planning as early as possible and allocate the right amount of funds to the right investment products. Utilize the Net Brokers app and leverage our Child Education Calculator to determine the future cost of your dream education.
- Avoid making lump-sum investments and instead opt for SIPs. This strategy allows you to benefit from rupee cost averaging over the long term, reducing the impact of market volatility.
- Consider increasing your SIP investments incrementally as your income rises. This approach can help you either use the funds for other purposes or expedite the growth of your education corpus.
The rising cost of education is inevitable, but being unprepared isn’t. By acknowledging the pace of inflation and starting early, parents can transform a daunting financial challenge into a well-managed goal. The choice is simple: start small today or struggle big tomorrow.
Planning for your child’s future can feel overwhelming—but you don’t have to do it alone. At Net Brokers, we help you cut through the noise, choose the right investments, and build a plan that fits your goals and risk appetite. Call us now!
Start today—secure your child’s tomorrow. Let’s make their dreams a reality.
For more information, get in touch with us today! Download our mutual fund app & start investing for your long-term financial goals.
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