How Much Should You Save If Your Child Studies Abroad

A parent with an 8-year-old recently sat through a cousin’s farewell dinner before the cousin left for a master’s degree in the US. The total bill for that two-year program, tuition and living costs combined, came to just over ₹90 lakh. The parent went home and did some quick mental math. Their own child is 10 years away from that stage. If costs are already this high, what will they look like by then?

That question is worth answering properly, not guessing at. Here’s how to turn a vague worry about foreign education into an actual savings number, and how a child policy can help you get there systematically.

Why Does Studying Abroad Need A Different Savings Target?

Domestic education planning usually revolves around a manageable, well-known number. Foreign education changes three things at once: the currency, the cost base, and the timeline you’re working with.

• Costs are already high in absolute terms, often several times a comparable domestic program.
• Currency movements can push the actual rupee cost higher by the time your child enrolls, even if the foreign tuition itself doesn’t rise.
• Education inflation on top of both factors compounds the gap further the longer you wait.

A savings plan built for a local college fund usually falls short here, simply because the target itself is a different order of magnitude. Treating a foreign education goal like a scaled-up version of a domestic one usually means discovering the shortfall too late to fix it.

Who Should Start Planning For This Now?

This will be applicable to you in the following instances:

• If your child shows an interest in areas that have many international programs, such as engineering, business, medicine, or research.
• You or your spouse have discussed a foreign degree as a real possibility, not just an aspiration.
• You want the option open, even if it’s not a certainty, since waiting until it becomes certain leaves far less time to save.

You don’t need full certainty about the country or course today. You need enough of a savings base that the option remains realistic when you do need to decide. You must always start at the exact moment you have the least time left so that you can start saving properly.

How Much Does Studying Abroad Actually Cost Today?

Costs often vary by country and course, but a few reference points can help you set expectations.

• A two-year master’s program in the US, including tuition and living expenses, is between ₹70 lakh and ₹1.2 crore today.
• A one-year master’s degree in the UK tends to fall somewhat lower, though still a significant sum once living costs are included.
• An undergraduate education for four years overseas will easily cost more than either of these.

This is simply a range, not a specific number, as the amount will depend highly on the exact university and country your child chooses in the future. Even within one country, an education in a city will cost more than the same course in a smaller place, mostly because of differences in living costs.

How Do You Convert Current Costs Into a Future Savings Goal?

Take today’s cost for the kind of program you’re considering, and account for the years between now and when your child would actually enroll.

Education costs have been rising by roughly 11% to 12% a year. That means a program costing ₹70 lakh today could realistically cost well over ₹1.5 crore in 10 years, even without factoring in currency movements separately.

• Start with today’s cost for a realistic program type.
• Assume it roughly doubles every 6 to 7 years at that inflation rate.
• Use the resulting figure as your actual target, not today’s cost.

This is uncomfortable to look at directly, but it’s far more useful than discovering the real number only when your child is applying.

What If You’re Not Sure They’ll Actually Study Abroad?

Uncertainty about the destination doesn’t mean you should wait to start. A savings plan built for a large education goal can still support a domestic degree if that ends up being the choice, since a larger corpus covers a smaller need without issue. It’s much harder to do the reverse.

What Should You Do Next?

A dedicated child policy built around an education goal gives you a structured way to work toward this kind of target, rather than saving informally and hoping it adds up in time.

A few concrete steps:

• Pick a realistic program type and country as your planning reference, even if it’s not final.
• Apply the 11% to 12% inflation rate to today’s cost to get your actual target, not the current price tag.
• Compare that target against a best child education plan calculator to see what monthly amount gets you there.
• Choose a plan that also includes a waiver of premium, so the savings continue even if you’re not around to keep contributing.

Final Thoughts

Premiums paid toward a child education plan qualify for a tax deduction of up to ₹1.5 lakh a year under Section 123 of the Income Tax Act, 2025, subject to conditions, and the maturity amount your child eventually receives is generally tax-free as well. Tax rules can shift with each budget, so confirm the current position closer to when you file.

A foreign degree a decade from now will cost far more than it does today. The gap between guessing at that number and actually planning for it is exactly the gap a best child education plan is built to close.

 

Also Read:

Create A Quiz On Inorganic Chemistry Exceptions To Help Me Revise For My Jee Main Exam