With 66% of its 1.3 billion people in the working age of 15 to 64 years, India’s productive workforce is only second to China. However, unlike its neighbor, India has not been able to reap dividends out of this demographic advantage because of rising education expenses.
As reported in an article in the Hindu, M.P. Punia, the vice-chairman of All India Council For Technical Education (AICTE), a government regulatory body, stated that the costs of higher education were so high in India that students were unable to recover the money they have invested even after working their entire life. That paints a bleak picture but it’s not so far from the truth.
Paying for a good higher education for your children can cost a lot of money and an education loan means an added burden on them to pay off the loan. You have to start planning for your child’s higher education when he/she is still in pre-school or even earlier so that you have a substantial corpus at the right time. However, when you do start your savings or investments, you have to factor in the rate of inflation over the next 10-15 years.
Assuming that the rate of inflation is constant at 10% per annum, a good engineering course after 15 years will cost somewhere around Rs.40-50 Lakh. Medical courses will cost around Rs.1 crore in the same time frame. If you want to send your child for higher education abroad, it will cost you, even more, depending on the course and overseas university.
Rather than a fixed deposit, investing in a child ULIP plan such as Bajaj Allianz Future Gain from Finserv MARKETS helps grow wealth to meet higher education expenses while guaranteeing a sum assured to the child as insurance in case of the unfortunate death or disability of the parent.
Typical costs of a 15-year education in India
Primary education costs – Elementary or primary education is for children between the ages of 6 to 14 years. According to 2018 estimates, you may end up paying approximately Rs.192,000 to give your child a decent primary education up to the age of 8 years. While primary education is free up to the age of 14 years in government schools, private schools charge Rs.1,200 – 2,000 per month.
Secondary education costs– Your children will undergo secondary education between the ages of 12-18 years and that is when expenses start to rise. Considering that the admission fee is Rs. 200 and the tuition fee is Rs.5,500 per month, you will spend Rs.3,97,200 in the next two years. That is without taking into consideration a myriad of other expenses such as developmental fees, costs of books, uniforms, bus fees, and other expenses. If your kids stay in a hostel, the boarding charges comes to around Rs.25,000 per month, which means an additional expense of Rs. 3 Lakh per annum for the next six years.
According to Associated Chambers of Commerce and Industry of India (ASSOCHAM) survey, primary and secondary education costs increased by a mind-boggling 169% between 2005 to 2011.
A child plan certainly shields you against such insane price rises if you start as soon as your child is born. Longer the time frame you have to accumulate wealth through top performing ULIP funds at Finserv MARKETS, the better it is for you and your child’s future as it prepares you to meet financial challenges for important life events such as higher education, marriage, your child’s first business, etc.
Graduation and post-graduation costs: For the purpose of simplicity, we’ll showcase the costs of graduation and post-graduation in a table according to stream, degree, and type of college.
|Stream||Type of course||Government (Cost in Rs.)||Private
(Cost in Rs.)
(Cost in Rs.)
|Engineering||Undergrad||5-6 lakhs||8-10 lakhs||1 Crore+|
|Medical||Undergrad||5-10 lakhs||18-20 lakhs||1 Crore+|
|Commerce & Arts||Undergrad||2,000-15,000||2.5-5 lakhs||50 lakhs+|
|Commerce & Arts||Postgrad or MBA degree||–||15-20 lakhs||–|
Note that this is the current prevailing market price of private education in India; you need to take into consideration the rate of inflation if you are starting a ULIP child education plan for your child.
The Bajaj Allianz Future Gain available on Finserv MARKETS is an innovative child plan that comes with 2 investment strategies and choice of 7 different investment funds. You can enjoy ULIP tax benefits under sections 80C and 10(10D) along with free life cover while securing a bright future for your child.
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