Are You Spending Too Much On School Fees?

The race to secure a good education has never been more expensive—or more stressful—in India’s metros. With the number of quality public schools shrinking and private schools, including international ones, with dazzling facilities mushrooming, many middle-class families feel compelled to pay premium fees just to keep their children in reputed schools.

Their reasons vary, from ensuring the “best” education for their child, securing admission in a “good” school, to building the right network early for professional success later.

As many parents increasingly find themselves caught between aspiration and affordability, this new trend gives rise to many questions. Does expensive education guarantee success? Are only expensive schools good? What’s the larger cost of such schools—is it affecting crucial long-term goals, such as saving for higher education for the child or building a retirement corpus for the parents?

We explore how parents can find a middle ground that ensures quality education today without compromising financial security tomorrow, and balance ambition with prudence through smart planning, budgeting, and a clear understanding of what defines “best” education.

The Rising Cost Of Schools

Every parent wants their child to receive the best education possible, but quality education today comes at a hefty and ever-rising cost.

According to EduFund, India’s first education fund platform, private school tuition fees in Tier 1 and Tier 2 cities range between Rs 2,500 and Rs 8,000 per month, with annual fees in premier schools like DPS RK Puram, Delhi, crossing Rs 1 lakh.

According to a media report, India’s top private or international schools are charging between Rs 12 lakh and Rs 20 lakh annually.

Another media report on Top 8 Residential Schools in India 2024 says that India’s top ranking residential schools that follow an international curriculum are charging up to Rs 30 lakh annually.

The cost of boarding schools, which promise top-notch facilities, can be staggering. Some institutions charge between Rs 6 lakh and Rs 12 lakh per annum, covering tuition fee, boarding, and meals.

The real cost, however, often goes far beyond the tuition fee. Uniforms, gadgets, excursions, and peer-influenced lifestyle spending quietly multiply the financial burden.

Anup Seth, chief distribution officer at Edelweiss Life Insurance, says that choosing a premium school is not just about tuition fee. Extra cost can add up by 20-30 per cent over basic education cost. Seth adds that many parents realise the additional costs (apart from the tuition fees) only later. Seth has two daughters. The elder, Krisha (21) is studying at Parsons School of Design, New York, while the younger one, Kiara (15) is in Grade 10 at Oberoi International School, Mumbai.

He says: “Like every other parent, I have had that moment of shock when looking at education costs. Whether it’s international schools, coaching classes, or college fees—the trajectory is only upward. That’s why I began investing for their education just a few months after they were born. I started carefully building a corpus based on what I believed would be their future path.”

He adds: “But the rising cost is only half the challenge; the other half is how your children’s dreams evolve. Their aspirations shifted, opportunities changed, and suddenly, my original plan needed a complete recalibration. That experience taught me that education planning is all about building flexibility to adapt to changing dreams while staying ahead of costs. You can’t control either variable, but you can plan knowing both will change, and that’s what I tell every new parent I meet.”

Government schools are far cheaper, but quality education remains a concern in many cases.

Do Expensive Schools Guarantee Success?

This is an important question families must answer. Does higher school fees truly translate into better academic or career outcomes for children, or is it largely about perception and peer pressure?

According to financial experts, it would be too simplistic to equate higher school fees with guaranteed academic or career success. “Fees often reflect the cost of infrastructure, international curricula, and co-curricular exposure, but the true differentiator remains the quality of teachers and the school’s vision for holistic development. Many mid-tier schools with dedicated educators deliver equal or better outcomes than high-fee institutions,” says Col. Sanjeev Govila (retd), certified financial planner and CEO, Hum Fauji Initiatives, a financial advisory firm.

Recalling his academic years at the Banaras Hindu University from 1968 to 1971, Prof. Bejon Kumar Misra, an international consumer policy expert based in Hyderabad, says those were among the best years of his education, pursued at remarkably low fees. In fact, the university fees was lower than what he paid at Loyola School, Jamshedpur, for his high school education.

He says: “High fees does not necessarily mean better education. I have friends who studied in government schools with minimal or almost no fees, yet went on to secure admission in IITs and AIIMS. The quality of education is not determined by the amount of fees paid.”

Affordability Vs Aspiration

With limited quality public school options, how should parents weigh the choice between an affordable school and the lure of high-cost private ones?

“As a parent, it’s not an easy choice, but it’s important to stay practical. Striking a balance between your income, expenses, and the amount you allocate to education is essential. You can’t break the skew, but you can manage it wisely,” says Santosh Joseph, CEO, Germinate Investor Services, a boutique financial services company.

Think of higher education, to start with. Higher education, especially global programs, is far costlier and needs long-term financial planning.

Government institutions, such as the Delhi University and the IITs remain relatively affordable, with annual fees ranging from Rs 20,000 to Rs 2 lakh. However, many private universities in India charge between Rs 5 lakh and Rs 15 lakh per annum for undergraduate programs, making them unaffordable for a large section of middle-class families. At the same time, with the limited number of seats in public institutions, more and more children are securing admission in private institutions.

A strong school education builds the foundation of learning, values, and personality, which is essential for higher studies, so pick a school that nurtures your child’s growth, and don’t just fall for the optics. “A good school inspires curiosity, instils values, and develops resilience, not just delivers polished facilities or high English accents,” says Govila.

Don’t fall for peer pressure or labels. “You need to ignore the noise and focus on what truly matters—quality education,” says Joseph.

Seth adds: “Choosing a school can be stressful, especially when social media, friends, and rising fees create pressure to keep up. But with the right strategies, parents can make thoughtful decisions while teaching children lessons about money.”

What Should You Do?

Strike A Balance: Remember, children need funds for their bigger aspirations tomorrow. Explains Seth: “Think of it like building a house. Schooling is the foundation, but higher education is the roof; you need both, and one should not collapse because the other is too heavy.”

Parents must ask themselves: will higher school fees leave them unable to fund a child’s dream college later?

Says Govila: “Prioritisation should be balanced. Choose a school that offers strong academic quality and values without stretching finances, while also setting aside dedicated investments early for higher education. As a principle, don’t let prestige overwhelm practicality, because higher education will decide the child’s career trajectory.”

Each family’s priorities differ. Practically, however, allocating more than 15-20 per cent of the annual take-home income towards school fees can start crowding out other critical goals such as higher studies, retirement, and emergency reserves.

“If the school demands significantly higher fees, parents should evaluate whether the premium is justified by measurable academic or developmental advantages,” advises Govila.

Plan Early: Education cost rises over time. Inflation for education in India is roughly 6-12 per cent per annum, according to Seth. So, today’s cost will likely be much higher in the future. For instance, an engineering degree that costs Rs 6 lakh today could rise to Rs 15 lakh in 15 years, while an MBA costing Rs 10 lakh now might cost Rs 30 lakh by then.

The only way to counter rising costs and avoid financial stress is disciplined and goal-based holistic financial planning and starting early.

“Given the unpredictability of education inflation and other life risks, it’s wise to start saving for your child as early as possible with a well-balanced portfolio of stable fixed-income instruments and growth-oriented equities,” says Joseph.

If you start early and maintain a fair equity allocation, long-term market growth can help bridge the education cost gap. “The key is to save early, plan prudently, and protect the goal with life or income insurance to keep it on track,” adds Joseph.

Taking insurance ensures that plans stay on track even in unfortunate events, says Govila.“Parents must treat education planning as a non-negotiable life goal, not an ad-hoc saving bucket, to protect children’s aspirations against rising unpredictability,” he says.

Don’t Compromise On Retirement Goal: This is a classic financial mis-step. Unlike higher education, where loans or scholarships can provide options, there is no loan for retirement.

Says Govila: “Striking a balance is non-negotiable: protect your retirement corpus first, because a secure parent creates a secure child. It is always preferable to compromise marginally on school facilities than to jeopardise lifelong financial independence for both the parents and child.”

If parents divert funds heavily towards school fees at the cost of investing for their retirement, they risk being financially dependent on their children later. Ironically, they would be burdening the same kids whose life they wanted to sort out and smoothen.

“By prioritising your retirement today, you protect your independence and allow your children to focus on their own goals instead of supporting you financially,” says Seth.

As a rule of thumb, try to invest about 10-15 per cent of your monthly budget for your retirement, starting around the time your child is born, while simultaneously saving for their education.

Ensuring quality education and financial security at the same time are not conflicting goals. True wisdom lies in striking a sustainable balance between the two. Ultimately, a school’s ability to nurture curiosity, character, and resilience matters more than the logo on the uniform or the size of the playground.

sanjeev.sinha@outlookindia.com