May is that time of the year when all parents of college going children have to figure out ways and means of arranging the fees for the upcoming semester, term or year in college, as the case may be. I have been in this situation for 5 years now and am likely to be in it for a few years more, given that I have two children.
Let me give a brief background for new readers here. My daughter Rinki has graduated from BITS Pilani, Hyderabad campus with BE in ENI. After her graduation in 2016, she has joined XLRI for their BM program and has now completed her first year there. My son Ronju is doing a 5 year dual degree course from BITS Pilani, Goa campus in Msc Maths and BE Computer Science. He will graduate in 2019 from there. If you are interested in knowing more about the overall costs and how I arranged for the funds etc, you can read up several posts available in the blog under “Education” category.
In this post I particularly wanted to discuss about the overall costs of a college degree in BITS and the inflationary nature within the course. Unlike some colleges, which give you a total figure for the 4 or 5 year course when you join, BITS only talks of the first year costs and then increases it every year. They have been transparent to say that the fees can increase by up to 15 % a year and, more often than not, it actually increases by that much. Let me take the component of the Tuition fee and see how it increased during the time Rinki was in college :-
- In her first year 2012-2013, Tuition fee was 70000 per semester or 1.4 lacs in the year.
- In 2013-2014, it was 78000 per semester or 1.56 lacs for the year.
- In 2014-2015, it was 89000 per semester or 1.78 lacs for the year.
- In 2015-2016, it was 101000 per semester or 2.02 lacs for the year.
Now apart from these there were Admission fees, hostel fees, mess fees, personal expenses, travel, practice school fees etc. From my notes I can see that the total expenses for her college degree was approximately 12 lacs.
At XLRI the overall costs are in the range of 24 lacs and you can add another 2 lacs or so for travel etc. Therefore her total Education costs in college is about 38 lacs.
For my son Ronju the last 2 years of Rinki will be common. Beyond this the fees for the other 3 years are as follows:-
- in 2016-2017, it was 1.13 lacs per semester or 2.26 lacs for the year.
- In 2017-2018, it is 1.30 lacs per semester or 2.60 lacs for the year.
- in 2018-2019 it will be 1.5 lacs per semester or 3 lacs for the year.
Therefore for Ronju’s graduation the overall costs will be in the range of 20 lacs or so. I have not thought about his PG yet, as he is not sure whether he wants to do one. However if it is from a good B school, it will be in the range of 28-30 lacs. Assuming this to be the case, his total costs of college education will be in the range of 50 lacs or so.
From the above data you will be getting a pretty good picture of the educational inflation too. In 5 years the tuition fees has increased from 1.4 lacs to 3 lacs. The other costs have also increased and as you can see, a 4 year course for BITS starting today will easily cost more than 22 lacs or so, all things considered. Just the Tuition fees will be 13 lacs or so.
How will this look if your child is starting college after 15 years? Well, at an inflation of 15 % the tuition fees alone will be 1.8 crores. I know this sounds fantastic, but remember just 10 years back the Tuition fees of BITS was 50000 a year and it has gone up more than 5 times.
I am happy to spend this amount on giving a good education to my children as it is going to be a huge competitive differentiating aspect. However, I was able to do so as I prepared for the same in terms of my planning. Even then the inflation was surprisingly high and I had to rejig some of my plans.
You need to work on your plans right now and put them in place.