Smart Financial Strategies for Parents Funding Foreign Education
Need over ₹2 crore for foreign education? From scholarships to SIPs - know the smart ways parents can plan for expensive foreign degrees
The Economic TimesImage: The Economic Times
Pursuing a degree abroad can cost Indian families over ₹2 crore, considering tuition and additional expenses. Early planning, including systematic investment plans (SIPs) and understanding education inflation, is crucial. Parents should also consider scholarships and education loans as part of a comprehensive financial strategy.
- 01Total costs for foreign education can exceed ₹2 crore, including tuition and living expenses.
- 02Education inflation is rising at 8-12% annually, impacting long-term financial planning.
- 03Systematic Investment Plans (SIPs) are effective for building a fund for education.
- 04Parents should not rely solely on scholarships; they should plan for guaranteed funding first.
- 05Education loans are increasingly common and can cover total costs, but should be managed wisely.
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Studying abroad at prestigious universities in countries like the US, UK, Canada, or Australia can cost Indian families upwards of ₹2 crore. This figure includes not only tuition fees, which range from $25,000 to $60,000 per year, but also additional expenses such as accommodation, food, and health insurance, which can increase total costs by 40-60%. Experts emphasize the importance of early financial planning, as education inflation is estimated at 8-12% annually, compounded by the depreciation of the Indian rupee. Parents are advised to start investing early through systematic investment plans (SIPs), which can help build a substantial corpus over time. A diversified SIP portfolio is recommended, focusing on equities initially, then gradually shifting to safer investments as the child approaches college age. While scholarships can alleviate some financial burden, they should not be relied upon entirely. Instead, families should prioritize savings and education loans, which are now commonly used to cover total educational expenses. Overall, proactive financial planning can significantly ease the burden of funding foreign education.
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Effective financial planning can reduce the stress of funding foreign education, making it more accessible for families.
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