In 2004, the annual tuition for an undergraduate programme at IIT Bombay was around ₹25,000. Today, it’s over ₹2 lakh—and that’s just tuition. Add living costs, materials, coaching, and travel, and you will be spending around ₹15–20 lakh for a premier undergraduate degree in India. Abroad, the numbers are even starker. A 4-year undergraduate course in the US at a private college now averages ₹1.2–1.5 crore, up from ₹70-90 lakh a decade ago. What’s alarming is that this isn’t just inflation—it’s education inflation, which typically rises 2x faster than CPI.

Yet, despite this steep and predictable trend, most Indian families postpone education planning. By the time the child is in Class 10 or 12, the funding gap feels humongous. The financial and emotional costs of this delay are enormous and avoidable.

The true cost of procrastination

India’s education inflation rate has hovered around 10–12% annually over the last 15 years. That means the cost of a ₹10 lakh degree today could double to ₹20 lakh in just 6–7 years. Unfortunately, salaries and savings rarely grow at that pace.

Let’s look at an example. Suppose a parent starts a ₹5,000 monthly SIP when their child is born. Assuming 12% annualised returns, a diversified mutual fund portfolio can grow this into ₹30-40 lakh in 18 years—enough to cover top-tier college costs. But if the same parent starts at age 12, they’ll only accumulate around ₹15-16 lakh, even with the same investment amount.

What’s the fallback? Education loans currently have interest rates between 10–14%. Over a 10-year tenure, a ₹20 lakh loan could cost nearly ₹35–40 lakh to repay—more than double the amount saved through early investment.

The Emotional and Psychological Burden

When funding education becomes a last-minute scramble, families are forced into reactive decisions: switching from a global university to a local one, cutting short plans for post-graduation, or relying on extended family support.

For instance, one family had to turn down an offer from NYU for their daughter and settle for a domestic backup because visa timelines clashed with loan approvals. Another student opted out of a master’s program in the UK despite receiving a scholarship because living expenses were underestimated, and the family couldn't fund the shortfall.

These are not rare stories—they’re routine. And the guilt, stress, and missed dreams stay with both parent and child.

Why starting early is smart (and powerful)

Investing early gives you three massive advantages:

Power of Compounding: Even small SIPs, if started early, can grow into meaningful amounts. A ₹3,000/month SIP over 18 years at 12% CAGR becomes over ₹22 lakh.

Flexibility in Choices: You can save gradually for multiple goals—school, undergrad, postgrad—without pressure.

Lower Reliance on Loans: You avoid the debt trap and interest burden, freeing up income for other life goals.

Historically, mutual funds in India have delivered strong long-term returns:

Equity funds: 10–15% CAGR over 10–20 years (Nifty 50 TRI CAGR over last 15 years: ~12%)

Hybrid funds: 8–10% CAGR with lower volatility

Debt funds: 6–8% CAGR for short-term needs or conservative investors

The Indian context: Rising aspirations with lagging awareness

India is undergoing a silent shift. With over 35 crore school-age children, the demand for quality education—both in India and abroad—is booming. But awareness about structured education planning is still low, especially in Tier 2 and Tier 3 cities.

Unlike the US, where 529 Plans offer tax-friendly education savings vehicles, India lacks a central framework or incentive for education savings. Most parents rely on FDs, LIC policies, or gold, not realising that inflation eats into returns and limits growth.

The best time was yesterday; the Next best is now

The cost of delay is invisible—until it hits you hard. Every year you wait makes the target steeper and the journey tougher.

The best time to start planning your child’s education was yesterday. The next best time is right now.

Let’s build a future where families are empowered, not burdened—where dreams are funded, not deferred.

Start early. Stay steady. Empower their future.

Views are personal. Author is Co-Founder and CEO of EduFund.