From Director’s Desk | Anirudh Dar

Growing up, we often heard others ask our parents as to what we would want to become when we grew up. There were the standard expectations – Doctor, Engineer, etc. For us as children, that is where the topic ended. There was not a care in the world about saving for the impending education. Fast forward 35 years, and I, as a parent often think about the where’s and the how’s of the money for my son’s education. Education was always expensive, and it is today, one of the fastest inflating costs. Consider this: A 3-year PGM from IIM Ahmedabad today costs approximately Rs. 23 lacs. Assuming a 10% education inflation, this cost would inflate to Rs. 96 lacs in 2035. A 4-year Engineering Degree from IIT Bombay costs about Rs. 10 lacs today. In 2035, it would cost Rs. 41.80 lac. Similarly, a 4-year MBBS program from Manipal University, Mangalore that costs about Rs. 58 lacs today will increase to Rs. 2.42 crore 15 years from now. One of the biggest mistake’s parents make while planning for education goals for their children is failing to account for inflation. Staying on this example, if you have not made any investments or savings towards the above goals, you will need to save Rs. 53,000 per month to send your child to IIM or Rs. 24,000 per month for IIT or Rs. 134,000 per month to send them to Manipal University. These savings need to start now and need to continue for the next 15 years! What do you think will happen to these numbers if you decide to send your children overseas into a US University? If you do not know, read on. A 4-year Undergraduate course in the USA in a private college costs about USD 50,000 per year (USD 200,000 in total). A follow-up MBA would cost about USD 72,000 per year (USD 144,000 in total). In today’s cost, this works out to Rs. 2.59 crores. Now remember inflation. Also remember that our currency has continued to depreciate against the US Dollar on a regular basis. There is no doubt we love our children and want them to have the best of everything in life and this includes education. The question is are we saving enough for them?