Education Calculator

This education calculator will take in to account the effect of inflation to arrive at the amount you need to save every month to provide quality education for your child.


Results shown for illustrative purpose only and should not be construed as investment advice.

Education calculator

Education planning has become increasingly important over the years. The cost of education is rapidly rising, and at a pace that can be higher than overall inflation. There are far more opportunities in higher education now, not just within our own country but also in different countries. Saving up for your children’s education therefore has become crucial in order to fund college and post-graduation expenses comfortably.

This education calculator will help you know how much money you will require for your child’s education when your child reaches the age at which he/she enters college or needs a post-graduation degree. You will also be able to figure out how much money you will have to save and invest regularly in order to achieve this goal.

How do you use the education calculator?

With skyrocketing education costs, it is important for you as a parent to be aware of the expenses and how much a full college education can amount to, beforehand. This education calculator will help you know that. The following are the steps to follow to use this calculator:

  • The first step is to input the cost of education in today’s value. The cost of education will vary depending on the nature of course. Since you do not really know what course your child will take, you can take a rough average of the bigger and more popular courses to get an idea.
  • The second step is number of years you have until you need the money for your child’s education.
  • The third step is to enter the rate of inflation by which education costs can go up. While you may want to simply go with the overall inflation number, you can use specific breakdowns available for education inflation for a more accurate estimate. This will be available on the website of the Ministry of Statistics and Programme Implementation.
  • The fourth step is to enter the rate of return on the investment that you expect. Do bear in mind that being realistic with your return expectations will help you achieve your goal better.

After keying in the above details, the calculator will give you two results: one, the estimated future cost of education and two, the monthly savings that will help you reach that amount.

Let us take an example to understand the steps involved in the education calculator better.

For instance, let’s say the cost of doing an engineering course in 2020 is Rs 10,00,000 and your child is now in the 8th grade. You would therefore require the amount in 5 years. We set the inflation at 6% and return expectation at 12%.


Cost of education in today’s value: (Rs) 10,00,000

Number of years remaining: 5 years

Expected inflation: 6%

Expected returns from investments: 12%


Estimated future cost of education: (Rs) 13,38,226

Monthly investment needed: (Rs) 16,386

Benefits of using the education calculator

  • Education calculator helps you understand how much college courses can cost down the line so that you are not caught unaware at the time of need. This helps reduce your dependence on loans to meet your child’s educational needs.
  • Education calculator helps you plan how much you need to invest to build the amount required, and helps prioritise savings as education is a non-negotiable goal.
  • Estimation of the amount needed both in terms of total cost and monthly savings allows you to choose the right mutual fund schemes.

Importance of education planning

The cost of education is often underestimated, as the impact of inflation is not taken into account. The fact that education costs can rise much faster than headline inflation also tends to get missed. At the time of need, therefore, parents suddenly find themselves short of funds, and will then have to resort to loans to bridge the gap. Taking on debt at a later stage in life also throws other financial goals such as retirement in disarray. The amount available to save each month for an individual is also limited. This amount needs to be apportioned towards different goals.

Planning using tools such as an education calculator is a response to such challenges and enables optimum utilization of limited resources. While economic fluctuations are unpredictable, planning early can give a certain amount of immunity against it. A wise strategy would be to start putting aside small sums of money today, rather than allowing yourself to get overwhelmed by large payments and lack of savings later.

Education Costs

The cost of education in India is increasing at a fast pace. For example, the cost of providing education in private institutions in 2014 was about 11 times that in government schools, while the cost of higher education from a private institution is about three times that in one run by the government. The returns on your child’s education fund needs to outpace inflation.

According to rough estimates, on an annual basis the education inflation is about 10-12 percent. You can use the education inflation detail provided by MOSPI to know the real inflation rate for education and you may be surprised to see the rate at odds with overall inflation rate.

To put the impact of inflation in perspective, consider an inflation of 6 per cent a year. An engineering course that costs Rs 6 lakh today will grow to Rs 14.4 lakh after 15 years. Similarly, an MBA course that costs around Rs 10 lakh would cost around Rs 24 lakh after 15 years. Using an education calculator will help you work out costs so that you are better prepared to meet your child’s education needs.

Even if the monthly sum looks too large to meet immediately, even starting small investments that is within your capacity will go a long way in building wealth and reducing the need to resort to education loans.

How to save for education

Knowing how much you need to save each month using the education calculator and how many years you have to build your corpus will help you design the portfolio that will best achieve your goal.

At PrimeInvestor, we have specially designed and provided a list of portfolios (Prime Portfolios) that will suit your education goal requirements. You can go by the timeframe-based portfolios and pick the portfolio that most closely matches your own time-frame. Alternatively, you can use the aspiration-based portfolios.

If you do not wish to use the readymade portfolios, you can build your own. You can pick the best funds from Prime Funds, our recommended mutual fund list. This mutual fund list covers different mutual fund categories. Prime Funds is bucketed in a system that uses your risk level and time-frame which makes it easy for you to pick the funds that best suit you. Each Prime Fund is unique and this allows you to build a diversified portfolio with minimal effort.

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