The cost of education in the US, which is the preferred destination for Indian parents, can exceed RS1.09 crore

Indians need to save more for their children's education abroad

 The cost of education in the US, which is the preferred destination for Indian parents, can exceed RS1.09 crore

  • September 9, 2015  
  • |  
  • UPDATED   17:55 IST

HSBC's latest edition of The Value of Education report 'Learning for Life' survey highlights the need for parents in India to save more to finance their children's international education in undergraduate studies. The total amount of expenditure that Indian parents have factored in for their children's international education is a fraction of the actual cost they will have to bear.

Indian parents, although willing to pay the maximum premiums (60%) to send their children abroad for higher education, have misjudged the cost which is disproportionately short of the actual cost of education for undergraduate studies.

HSBC surveyed 5550 parents across 16 countries and the findings reveal that on average, the extra cost of an international undergraduate education is 6.3 times more than parents would consider paying.

The report showcases how much extra parents would consider paying to send their child to university abroad. By comparing this expectation with the actual cost of completing an undergraduate degree as an international student, it is clear that many parents have unrealistic expectations. For parents in India, this gap is the highest.

The additional funding required by parents to send their child to university abroad can vary significantly between countries. The US is regarded as offering the best quality of education worldwide, but the total cost of attaining an undergraduate degree there as an international student can exceed INR 1.09 crore, making it the most expensive destination globally.

For Indian parents, the additional cost of sending their child to university in the US, rather than to a domestic university, is 12.6 times greater than the premium they would consider paying. This is because in India, where a domestic university education is the least expensive of the 16 countries, parents regard the most expensive destination overall - the US - as offering the highest quality education. PUBLIC

S. Ramakrishnan, Head of Retail Banking and Wealth Management, HSBC India commented: "Our findings reveal that there is a huge expectation mismatch between the costs factored in for an international undergraduate education by parents in India as compared to the actual cost of a foreign education. Therefore, there is a need for parents to realistically consider the costs, reevaluate their savings and plan accordingly so that they can support their children's ambitions."

"Starting to save early and seeking professional advice can help parents meet their children's education aspirations. At HSBC, we offer a suite of personalized products and expert advice that will help customers plan better for a comfortable and secure tomorrow."