How safe is your child’s foreign education fund? 🤔

ByNinad Mondkar

As per QS Rankings, Harvard University is ranked number four globally. Today, a two-year MBA tuition fee at Harvard is Rs 1.21 Crores. These fees exclude indirect expenses like living expenses, travelling expenses, utilities, monthly expenses, etc.

Why does it matter?

  • The US dollar has risen about 20% against the rupee in the last five years, which averages around 3.5% per year. The rupee depreciation will push the target further.
  • Education costs are rising at 10-12% every year. Education takes up the most significant chunk of a family’s budget after healthcare.
  • Assuming you have 15 years to achieve the goal with an inflation of 12%, the tuition fees will be ₹ 6.62 Crores!

Zoom In

  • The first question you must ask yourself is whether the goal is financially feasible. Have you already started investing in your child’s foreign education, or would you like to explore alternative options at other destinations or even back home?
  • You need to ensure that this one goal doesn’t come at the cost of your retirement goal.
  • When you plan, you need to consider not only the tuition fees but also the cost of travelling, living expenses, utilities, etc. Have you done that?
  • Does foreign education translate into good remunerative jobs in that country? Will the child be able to repay any education loan he has taken from his salary? Will he be able to support himself?
  • Do you have a backup plan if your child discontinues the course after several semesters? What is your plan B?

What Next?

It is advisable to seek professional help to ensure you are on the right track and review your plan regularly.

Disclaimer. Mutual Fund investments are subject to market risks, read all scheme related documents carefully