Planning for Your Child's Education in 2035

The number surprises most parents. But the solution, started early enough, is very manageable.

Let me start with the number

Education is getting more expensive — and faster than many parents realize.

A four-year engineering degree at a private college in India typically costs around ₹8–22 lakhs today, with budget private institutions at the lower end and premium institutions such as BITS Pilani already costing significantly more. An MBA from a leading Indian B-school generally costs ₹20–30 lakhs today. For families considering overseas education, a two-year master's degree in the US can easily exceed ₹1 crore once tuition and living expenses are included.

If private higher-education fees continue to rise at roughly 10–12% annually — a rate that has historically exceeded general consumer inflation — then a degree costing ₹10–20 lakhs today could cost approximately ₹26–62 lakhs by 2035. An MBA that costs ₹20–30 lakhs today could cost roughly ₹52–93 lakhs over the same period. These are illustrative projections based on sustained fee growth, not guarantees — but they demonstrate how quickly education costs can compound.

I'm not sharing this to alarm you. I'm sharing it because, in my experience, parents often underestimate what their child's education could cost — and that underestimation leads to starting late, investing too little, or both.

The real cost of starting late

The most powerful ingredient in building an education fund isn't the amount you invest. It isn't the fund you choose. It's time.

A parent who starts a ₹5,000 monthly SIP when their child is born is in a fundamentally different position from someone who starts the same SIP when the child turns 10. The difference isn't linear — it comes from years of compounding.

Assuming long-term equity returns of around 11–12% annually, here's approximately what it takes to build a ₹30 lakh corpus by the time your child turns 18:

• Start at birth: ₹3,500–4,000 per month
• Start at age 5: ₹6,500–7,500 per month
• Start at age 10: ₹13,000–16,000 per month
• Start at age 14: ₹35,000–45,000 per month, or you'll likely need to supplement with education loans

The monthly investment more than triples if you wait 10 years. That's the real cost of delay — not just missing out on returns, but needing to invest far more to reach the same destination.

What fund category makes sense

For a goal that's 10+ years away, equity mutual funds — specifically diversified equity or flexicap funds — have historically been the right category. They carry short-term volatility, but over 10–15 year periods, the evidence strongly favours equity over FDs, gold, or debt funds for long-term wealth creation.

As the goal approaches — roughly 3 years before you need the money — I typically recommend gradually shifting from equity to debt funds. This protects the corpus from a market downturn at exactly the wrong moment.

A word about education loans

Some parents ask: why plan at all? My child can always take an education loan. And yes, loans are available. But I'd gently push back on using them as the primary plan.

An education loan taken at 10–12% interest means your child starts their career in debt — sometimes significant debt — at exactly the moment they should be building their own financial foundation. A planned education corpus, by contrast, is a gift that compounds forward: it frees your child to take career risks, pursue further education, or simply start their financial life without the weight of debt.

Where to start

If your child is already 8, 10, or even 12, it's not too late. The corpus may need to be supplemented with some savings or a partial loan, but a well-structured SIP started today still makes a meaningful difference. The mistake is waiting another year because you 'haven't figured it all out yet.'

I'm happy to put together a quick estimate for your specific situation — your child's current age, the kind of education you're planning for, and what a realistic monthly SIP looks like for your income.