89% of parents in India are helping to fund their child’s education

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Mumbai: Parents in India are spending an average of USD18,909* (compared with USD44,221* worldwide) towards all aspects of their child’s education costs (including school/university tuition fees, educational books, transport and accommodation) from primary school up to university undergraduate level, accordingly to Higher and higher, HSBC’s new report in The Value of Education series.

Of the over 8,400 parents in 15 countries and territories surveyed, parents in Hong Kong (USD132,161), followed by the UAE (USD99,378) and Singapore (USD70,939), contribute the most towards all aspects of their child’s education costs.

Most parents in India (89%) are helping to fund their child’s current stage of education. Over nine in ten (94%) parents in India are considering postgraduate education for their child, and of these parents, 79% expect to contribute towards funding that too. The majority of parents in India (87%) think completing a postgraduate degree is important for their child to get into full-time employement in their chosen occupation, fourth highest amongst all surveyed markets.

S. Ramakrishnan, Head – Retail Banking & Wealth Management, HSBC India, said:“In today’s highly competitive global job market, education for young people has never been more
important. Parents across the world appreciate this and are willing to invest time and money to help their children get the best start in life. Their unwavering support shows in the personal, lifestyle and financial sacrifices they are making. From forfeiting ‘me time’ to giving up hobbies or reducing leisure activities, parents are going the extra mile to help their child succeed.”

PATH TO SUCCESS
When thinking about the courses they would like their child to study at university, parents in India show their ambition. Engineering (18%), computer and information sciences (15%) and Business, management and finance (13%) are the most preferred. Parents in Asia are the most likely to be optimistic about their children fulfilling their potential. The vast majority (87%) of parents in India are confident that their child will have a bright future, while 85% are confident their child will get a great job and 82% are confident that their child will get top grades in their exams.

Commenting on the findings, Professor Colin B. Grant, Vice President (International), University of Southampton, said: “The drive to achieve success also shines through in the clear preference towards STEM (science, technology, engineering and mathematics) and business/finance university courses – subjects where demand for highly skilled experts, and their value in the employment market, is set to
continue to rise in the coming years.”

PLANNING AHEAD
More than half (59%) of parents in India are funding their child’s education from day-to-day income, while 48% are funding through general savings, investments or insurance (third most likely in all surveyed markets) and almost a third (30%) are funding through a specific education savings or investment plan (ranked fourth in all surveyed markets) yet nearly a quarter (22%) do not know how much is contributed each year towards their child’s education.

To help fund their child’s education, many parents in India are making or have made a range financial sacrifices, including reducing spend on leisure activities (44%). Almost a third (32%) have worked extra hours in their existing job, 2nd highest amongst all surveyed markets, and over a quarter (27%) have contributed less to their own long-term savings or investments or have done so in the past (joint third highest in all markets surveyed).Additionally, 89% of parents in India are ready to make personal sacrifices for their child to succeed, joint fourth highest in all surveyed markets.

S. Ramakrishnan, Head – Retail Banking & Wealth Management, HSBC India, added: “While parents recognise that educating a child can be expensive, it is easy to underestimate the
full and long-term costs. According to the survey, 89% of Indian parents are ready to make personal sacrifices for their child to succeed. In nine of the 15 countries surveyed, paying for their child’s education is most likely to be parents’ biggest financial commitment, above others such as mortgage/rent payments and household bills. “To limit the strain that children’s education can have on family finances, it’s important to plan and save ahead. Seeking professional advice can help parents make more informed choices and develop a longer term financial plan.”