Huge mismatch between expected cost and actual cost of education: HSBC survey

The survey says that Indians need to save more for their children's international undergraduate education

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There is a huge mismatch between the expected cost and the actual cost of education and this shortfall is the biggest among Indians, said a survey by HSBC. It said that Indians need to save more for their children’s international undergraduate education.

The 'Value of Education report ‘Learning for Life’ survey said that the cost of education in the US, which is the preferred destination for Indian parents, can exceed Rs 1.09 crore. However, the total amount of expenditure that Indian parents have factored in for their children’s international education is a fraction of the actual cost they will have to bear.

The additional funding required by parents to send their child to university abroad can vary significantly between countries. The US is regarded as offering the best quality of education worldwide, but the total cost of attaining an undergraduate degree there as an international student can exceed Rs 1.09 crore, making it the most expensive destination globally.

For Indian parents, the cost of sending their child to university in the US, rather than to a domestic university, is 12.6 times greater than the premium they would consider paying. This is because in India, where a domestic university education is the least expensive of the 16 countries, parents regard the most expensive destination overall – the US – as offering the highest quality education.

Indian parents, although willing to pay the maximum premiums (60 per cent) to send their children abroad for higher education, have misjudged the cost which is disproportionately short of the actual cost of education for undergraduate studies.

HSBC surveyed 5550 parents across 16 countries and the findings revealed that on average, the extra cost of an international undergraduate education is 6.3 times more than parents would consider paying.

The report showcases how much extra parents would consider paying to send their child to university abroad.

By comparing this expectation with the actual cost of completing an undergraduate degree as an international student, it is clear that many parents have unrealistic expectations. For parents in India, this gap is the highest.