How private schools are pushing India’s middle class into a debt trap

A few months ago, a parent from Ahmedabad told me she was paying an EMI for her son’s annual school fee. The amount was ₹1.8 lakh for Class 4. She’s not alone. More Indian families today are quietly turning to debt to secure what they believe is a “better future” through private education.

This trend isn’t just anecdotal. It is national.

Over the past decade, enrolments in private schools have grown steadily, while enrolments in government schools have declined. Seven out of every ten new schools built in India during this period are private. Many charge fees that rival college tuition. The total cost of educating a child in a private school from nursery to Grade 12 can now reach ₹30 lakh, even before factoring in coaching and extracurriculars.

During the same period, household borrowing in India has surged. While housing and consumption account for much of it, education has quietly become one of the largest and fastest-growing contributors to financial stress for the middle class.

What makes this even more worrying is the gap between official inflation figures and real experience. While the government pegs education inflation at around five percent annually, parents know that the true rise in costs is far higher. Annual hikes in school fees, coupled with the growing demand for tech-enabled tools, international curriculums, and after-school learning programs, are making education costs feel like a moving target.

So what is driving this shift?

It is not just aspiration. It is fear. Middle-class parents today feel they are in a race they cannot afford to lose. There is constant pressure to provide the “best” for their children, and private schooling has come to symbolize that promise. But this mindset can lead to financial decisions that are reactive rather than well-planned.

Take Anand, a marketing executive in Pune, who recently shifted his son from a government-aided school to a reputed private school because everyone else in his housing society was doing the same. The fees amounted to ₹1.6 lakh a year. Add transport, uniforms, books, and co-curriculars, and Anand found himself paying school fees in instalments. It was more manageable in the short term, but it left no room for savings.

This pattern is repeating across urban India. And while education loans are still more commonly used for college and international degrees, the loan mindset has made its way into school education as well. More parents now opt for EMIs, credit cards, or even short-term loans to cover annual fees.

The issue here is not ambition. It is lack of preparation.

In my experience, most families plan for weddings and vacations far more proactively than they do for education. But education is one of the most predictable and long-term expenses a household will ever face. And it deserves the same attention and planning as retirement or healthcare.

If a parent starts a ₹5,000 monthly SIP at the time of a child’s birth, they could build a corpus of ₹18 to 20 lakh by the time the child turns 18. That alone could pay for an undergraduate degree without ever needing a loan.

Parents want the best for their children. That will never change. But the best should not come at the cost of their own financial peace. Education is an investment. The question is whether you’re funding it with foresight or with fear.

(Views are personal. The author is the co-founder and CEO of EduFund)