How parents save for child's university education expenses

Parents in India are taking on extra work, sacrificing holidays and borrowing money to put their children through university.

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A recent HSBC Value of Education survey finds that on average, Indian parents spend Rs 3.62 lakh for their child's undergraduate and post-graduate studies.
A major finanial planning goal that everyone has is saving for their children's education. To put their kids through a good university, parents are now taking on extra work, sacrfising holidays, and borrowing money. A recent HSBC Value of Education survey finds that on average, Indian parents spend Rs 3.62 lakh for their child's undergraduate and post-graduate studies. The study covered 505 parents and 100 students in India. Here are more such findings from the survey.

How much are parents spending on their child’s university education?
Rs 3.62 lakh is what Indian parents spend on average for their child’s undergraduate and postgraduate studies.


So are students taking up jobs to fund their studies?
A little less than 74% of students are working as they study.
  • 52% are working to gain job experience
  • 33% need the extra money
  • 29% are using it as an opportunity to meet new people
  • 25% are doing mandatory internships
What debts have parents taken on for their child’s university studies?
  • 31% have taken short-term loans
  • 26% have borrowed from family and friends
  • 24% have taken long-term loans
  • 21% borrowed on a credit card
Does this cover the entire cost?
No, Rs 4.15 lakh is the shortfall between what parents contribute and what students claim they spend on education. This gap is filled by bursaries, loans, other family members and students’ own earnings.

How are parents going the extra mile to support their child?
  • 79% of parents are paying for their child’s education from regular earnings.
  • The sacrifices they have made are many:
  • 60% took less expensive holidays
  • 59% took fewer holidays
  • 57% cut down on leisure activities
  • 49% took on extra work
  • 34% gave up on me-time
Given a chance, would the parents have approached the issue differently?
  • 61% wish they had started saving for the purpose earlier
  • 35% worry that they don’t have enough to support their child’s studies
  • 46% wish they had saved more regularly
What are the expenses that add up to Rs 7.77 lakh over the entire course duration?
  • Rs 2.93 lakh goes towards course fees
  • Rs 1.46 lakh has to be budgeted for accommodation
  • Rs 22,346 is spent on academic material like books
  • Rs 47,400 is eaten up by bills and utilities
  • Rs 50,400 is spent on clothes and make-up
The other major expenses include eating out, food and groceries, entertainment, transport, gym membership, credit card loans and holidays.

What should parents consider while planning their children’s education?
  • Start planning early
    They should seek professional help to make better informed choices.
  • Be realistic about the cost
    Take into account all costs and inflation.
  • Instill good financial habits
    Teach the child to use budgeting tools and online calculators.
  • Invest in a range of skills
    Allow the child to learn soft and job-specific skills.
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