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What is the first thing that comes to mind when inflation rises? Fruit and vegetable prices? Maybe fuel costs too. While discussions about the cost of lemons, tomatoes, and potatoes have been all the rage, there are other areas where inflation has consistently affected over time. The cost of education is one of those areas affected by sustained price increases. And the sad reality is that, unlike lemons and other foods, no one talks about the rising costs of education.
Educational inflation is a silent risk for all parents and students. Why? It can easily interrupt dreams of a bright future for a child about to enter college if taken lightly. Here’s how: Despite the severe pandemic, the Indian Institute of Technology (IIT), all units in the country, doubled their fees from Rs 90,000 to Rs 2 lakh for all undergraduate courses in 2021. For a parent without financial preparation, this would make a big dent in your pockets.
What is education inflation?
While food inflation rose 9.62% between 2012 and 2020, the cost of education rose 10%.
The data show the stark reality of how the rising cost of education has outpaced the cost of food and health care over the past decade.
This can be due to several factors: cuts in government funding, increases in the cost of living, tuition fees, administrative costs, security, modern school infrastructure, and technological advances in universities.
There are also hidden education costs. For example, exam fees have increased by 6.7% over the last year. In addition, the increase in transportation and accommodation costs for students also contributes significantly to the increase in the total cost of education. And finally, the cost of food is another important factor that is not emphasized when planning for higher education.
Rising Tuition Fees in India
College tuition fees in India have increased considerably over the years. In fact, here is some data on the full tuition fees for specific courses and how they are expected to increase based on the increase in fees in recent years.
The numbers are staggering and one of the main reasons students drop out midway through college. According to recent data released by the Unified District Education Information System, about 39 percent of students ages 20 to 24 drop out of college to help their families supplement household income. Therefore, it is becoming increasingly clear that proper educational planning is required in India as many parents are unaware of rising tuition fees and ways to cope with them.
Rising costs of studying abroad
If you are considering an education abroad for your child, you should be prepared to shell out a large sum to get your child into one of the best universities.
Here’s an example of why this can be an essential part of the process. The average cost of attending a four-year college or university in the United States increased 497% (cumulative) between the academic years 1985-86 and 2017-18, more than double the annual rate of inflation during the same period. The setting is not much different from other popular study abroad destinations like the UK, Canada, and Australia.
Even after the corona pandemic, many foreign universities have increased their tuition fees for 2022-2023. The University of Pennsylvania announced a 2.9% tuition increase, while Arizona State University announced a 5% tuition increase for international students. International students at the three University of Illinois campuses are expected to see a 1.5% to 2.5% increase in tuition.
This is a sensible way to save for your child’s studies
Unfortunately, education inflation only hits you when you’re about to pay your child’s tuition, which in many cases is only a year or two before the due date. And suddenly you have only two options: compromise the quality of education or opt for high-interest loans.
Whatever you decide, your child will suffer. Both of these decisions will have a huge impact on your child’s future.
You can avoid financial stress by saving early for your child’s college education. The sooner you start investing in your child’s education expenses, the more time you give your savings to grow.
Find the right investment tool that fits your educational goal and start investing to reach the goal. If you’re overwhelmed with the options available, find a financial expert to help you with your educational investments.