The coaching race is costing parents lakhs. Here's how to plan
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- MoSPI data shows Indian household spending on education ballooned from ₹1.8 lakh crore in 2012 to ₹8.43 lakh crore in 2024, a 4.6-fold increase in 12 years, with education inflation consistently running at 10-12% annually—nearly double general CPI.
- Ramesh Vishwanathan, CEO of FPSB India, said a two-year IIT-JEE integrated coaching course for classes 11-12 costs parents ₹3.5-4.5 lakh, excluding travel, exam registration, and study materials.
- Roughly 35 lakh students appear for NEET and JEE exams, but all IITs combined offer only 18,951 seats—an extreme supply-demand mismatch that Vishwanathan said pulls parents into a high-stakes coaching ecosystem.
- Sanjay Rahate, an internationally certified master career coach in Mumbai, warned of 'herd mentality' among parents, noting competitive exams focus on information retention rather than conceptual understanding, and AI-driven career anxiety is further inflating demand for coaching institutes.
- Vishwanathan warned that parents who fail to plan often dip into retirement portfolios, liquidate equity investments prematurely, take high-interest loans, or pledge gold to cover coaching costs.
- Jinal Mehta, a certified financial planner in Mumbai, recommended a two-bucket strategy: coaching costs (needed in 2-4 years) parked in FDs, short-duration debt funds or arbitrage funds; college costs (5+ years away) held 60-80% in equities, gradually de-risked as the goal approaches—and to avoid small-cap, mid-cap, credit-risk, long-duration, and sectoral/thematic funds.
- Vinit Iyer, managing director at Prudeno Wealth Advisors, suggested a conservative hybrid approach with only 10-20% equity allocation, advising that if a student repeats coaching, families temporarily draw from the college corpus and replenish it later.
Why it matters: For Indian families with college-bound children, coaching costs are now an unavoidable near-term liability that arrives years before the actual tuition bill—and at 10-12% inflation, those costs double every six to seven years. Without disciplined, bucketed savings, parents risk raiding retirement portfolios or taking high-cost loans, effectively mortgaging their own futures to underwrite a child's shot at a premier seat where ~35 lakh JEE/NEET candidates compete for roughly 19,000 IIT slots.
