From Sips To Safety Nets: Parents’ Guide To Rising Education Costs

The rising cost of education in India and abroad has become a pressing concern for families. According to recent estimates, education inflation is averaging around 4% annually, making higher studies significantly more expensive over time. Parents are increasingly turning to financial planning tools such as systematic investment plans (SIPs) and insurance-linked safety nets to secure their children’s future.  

SIPs allow disciplined monthly investments in mutual funds, leveraging the power of compounding to build a substantial corpus over 10–20 years. For example, targeting a corpus of Rs 1 crore in 15 years may require a monthly SIP of Rs 20,000 depending on returns and inflation. Alongside SIPs, child-specific insurance plans and education-focused funds provide additional protection against unforeseen financial disruptions.  

Financial Planning Tools  
Systematic investment plans (SIPs) help build long-term corpus through compounding.  

Inflation Impact  
Education inflation averaging 4% annually increases future costs significantly.  

Safety Nets  
Child insurance and education-focused funds provide financial protection.  

Key Highlights  

• Parents face rising education costs due to inflation  
• SIPs offer disciplined and effective long-term savings  
• Insurance plans act as safety nets against uncertainties  
• Early planning reduces financial stress during college years  

Future Outlook  
With education costs expected to rise further, early and diversified financial planning remains essential. Parents who combine SIPs with insurance and other instruments can ensure their children’s aspirations are met without compromising household stability.  

Sources: Reuters, Policybazaar, ZeeBiz