What is Child Education Planning?
Child education planning is planning the course of your investments in view of the fund requirements for your child for his/ her higher education.
Depending upon the corpus required and time period in hand, one can choose to invest a lumpsum amount or for systematic instalments.
Why planning for your child’s education is required?
While on average retail inflation for long term is 4-7%, for education Is whooping 11 to 13% year on year basis. There was a time when parents could afford not to pre plan for the same, and pay out of the pocket’ but those times are long lost.
The two year post graduate fees in IIM – Ahmedabad for 2019-2021 batch is Rs. 23,00,000. For the batch 2007-09, it was Rs. 4,30,000. In these 12 years, the premier educational institution has hiked to almost 435%!!
If the education inflation continues to grow at this rate, no wonder what amount will be required to fund child’s educational expense.
This scenario is not just for higher educational institutions. The same trend is being observed for undergraduate courses as well.
As a parent, you should be planned for your child’s education, otherwise it will result in huge withdrawal from your pocket, or the only option available will be resorting to education loan.