FinCalc

Education Cost Planner

Estimate future education costs with inflation

₹
Yrs
Yrs
%
%

Future Cost

₹54,39,247

In 13 years

Monthly SIP Needed

₹14,469

For 13 years

Lumpsum Needed

₹12,46,535

Invest today

Total SIP Investment

₹22,57,122

Total you'll invest via SIP

Current Cost₹20,00,000
Years to Go13 years
Inflation Rate8.00%
Future Cost₹54,39,247
Monthly SIP at 12%₹14,469
Lumpsum Investment Needed₹12,46,535

What is a Education Cost Planner?

Education costs in India are inflating at 8-12% per year — significantly faster than general inflation. This means that engineering college costing ₹10 lakh today will cost ₹22-26 lakh in 10 years. This planner estimates the future cost of education based on current costs and education inflation, and calculates the monthly SIP you need to start today to fund it.

Starting early is critical because of compounding: the same goal requires dramatically less monthly savings if you start when your child is 2 vs 10. This tool helps parents set realistic targets and create a dedicated education fund.

When to Use This Calculator

  • Planning for a child's engineering/medical/MBA education starting from birth or early years
  • Estimating the future cost of studying abroad (factor in higher inflation and forex)
  • Calculating how much to save monthly for school fees across multiple children
  • Deciding between different education savings instruments (SIP, PPF, SSY, education loan)
  • Adjusting your plan when education costs change or a new goal is added

Key Terms

Education Inflation

The annual rate at which education costs increase, typically 8-12% in India — nearly double the general inflation rate. Private school and college fees have been increasing even faster.

Sukanya Samriddhi Yojana (SSY)

A government savings scheme for the girl child, offering 8.2% interest (FY 2025-26) with tax benefits under 80C. Lock-in until the girl turns 21. An excellent option for daughters' education fund.

Education Loan

Loans offered by banks for higher education in India and abroad. Interest ranges from 8-12%. Interest is tax-deductible under Section 80E for up to 8 years. A good option to bridge the gap if savings fall short.

SIP for Education

Starting a dedicated SIP in an equity mutual fund when your child is young gives the longest compounding window. Even ₹5,000/month started at birth can grow to ₹20-25 lakh by age 18.

Frequently Asked Questions

What education inflation rate should I use?+
For Indian private schools: 8-10%. For engineering/medical colleges: 10-12%. For top MBA programs: 12-15%. For studying abroad, factor in course fee inflation (5-8%) plus rupee depreciation (3-4%). Use at least 10% for conservative planning.
When should I start saving for my child's education?+
As early as possible — ideally from birth. Starting a ₹5,000/month SIP at birth with 12% returns gives ₹40+ lakh by age 18. Starting the same SIP at age 8 gives only ₹15 lakh. The 8-year head start nearly triples the corpus, thanks to compounding.
Should I use SIP or a child plan/insurance for education savings?+
SIP in a diversified equity fund is generally better than child insurance plans, which are essentially expensive ULIPs with high charges (2-3% per year). SIPs give you flexibility, transparency, and typically higher returns. Use a term insurance plan separately to cover the risk of something happening to you.
What about an education loan instead of saving?+
Education loans are a good backup, especially for postgraduate/abroad studies where costs are hard to save fully. But the interest cost is significant (₹20L loan at 10% for 7 years = ₹8.5L interest). Ideally, save enough for undergraduate costs and use a loan only for the gap or for post-graduation.