Is your child’s foreign education a crucial goal?

As the NEET-NET controversy continues to make news and students worry about their careers, another set of children and parents is probably looking at alternatives outside the country. Though the craze for foreign higher education has petered off a little in the light of job shortages, visa issues and higher living expenses abroad, many a parent is continuing to save for this goal without considering either the financial feasibility or practical problems of living and finding employment in these destinations. If you, too, are looking at this option, it is important to check if this goal is worth the effort you may be putting into it. Since this decision has the potential to wreak havoc with your finances and create uncertainty for your child, it’s best to consider the following factors before you proceed.

Is it financially feasible for you?
It is one thing to aspire for foreign education and quite another to muster the funds for it. Understand that the tuition fee itself in top destinations like the US, UK, Canada and Australia can easily cost anywhere from Rs.10-55 lakh a year. Add to it the cost of travel and living, and you could easily be spending Rs.60 lakh-2.5 crore for an undergrad course. In alternative, cheaper destinations or for postgrad courses, the cost would be lesser, but still add up to Rs.40 lakh-1 crore.

If you are not already flush with funds or have a large investible surplus, you will have to start saving for this goal very early or save a large amount every month if you start late. Make sure this one goal doesn’t impact your other important goals like retirement, or strains your monthly household budget to the extent that it causes friction among family members. It’s not worth pursuing a foreign education to the exclusion of everything else when there are plenty of good educational institutions in the country.

Have you planned for it correctly?
It is important to make correct goal value calculations so that you don’t run short of funds. It would be unfair to the child to raise his expectations, only to crash them. Take into account the tuition fee, living expenses and travel cost, besides education inflation of 10-12% and future value of the existing course costs. Then start saving for the goal on time by investing in the right instruments and with adequate amount. If you can’t afford the amount and are planning to take an education loan, be clear if you or the child will have the capacity to repay it.

What are the job prospects?
Another important factor while considering foreign education for your child is job potential of the course. Does the course translate into good jobs in the destination country? Is the remuneration offered by these jobs commensurate with the amount you have paid for the course, and will the child be able to repay any education loans he has taken with this salary? Will there be visa issues for continuing with a job after completing the course? Will the child be able to support himself with his new job or will you have to continue to prop him up? Research well on these topics and if the answers are not satisfactory, it’s best to drop the idea of foreign education.

Do you have a back-up plan?
Lastly,keep in mind that the child may not take a liking to the new country, course, people, or even the wealther. If he decides to discontinue after a couple of semesters, it will be a lot of money down the drain that could have been used for other crucial goals. If you still want to continue with it, have a back-up plan for the child’s education back home.

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Disclaimer: The advice in this column is not from a licensed healthcare professional and should not be construed as psychological counselling, therapy or medical advice. ET Wealth and the writer will not be responsible for the outcome of the suggestions made in the column.