The coaching race is costing parents lakhs. Here's how to plan
AI Summary
In India, household spending on education has surged from ₹1.8 lakh crore in 2012 to ₹8.43 lakh crore in 2024, driven by high coaching fees and educational inflation running at 10-12% annually. Parents are increasingly investing large sums, often at the expense of their savings, to secure their children's success in competitive exams like NEET and JEE, despite the limited number of available seats in prestigious institutions. This trend reflects a growing financial strain on families, compounded by a herd mentality and concerns over future job security in an evolving job market influenced by AI.
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Every year, thousands of parents sign cheques ranging from ₹2 lakh to ₹4 lakh without their child ever stepping into a university. Long before college offer letters arrive, families shell out lakhs in non-negotiable coaching fees, hoping the investment will improve their child's chances of success.
Without proper planning, many parents end up dipping into life savings or retirement corpus to fund coaching, while others are willing to borrow or even mortgage assets to pay for preparation programmes.
To understand the scale of the financial pressure, one must look at how education's share of household budgets has changed.
According to data from the ministry of statistics and programme implementation (MoSPI), total Indian household spending on education expanded from ₹1.8 lakh crore in 2012 to ₹8.43 lakh crore in 2024—a 4.6-fold increase in just 12 years.
Educational inflation in India consistently runs at 10-12% annually, nearly double the general CPI inflation rate. At a 10% inflation rate, education costs double every six to seven years.
"In India, costs and inflation related to education are growing at a multiple of general inflation," explained Ramesh Vishwanathan, chief executive officer (CEO), FPSB India, the Indian subsidiary of Financial Planning Standards Board.
"The first leg of these costs is the coaching classes or preparation required for graduation or post-graduation. Today, a two-year integrated course for IIT-JEE in the 11th and 12th standards will set a parent back by ₹3.5 lakh to ₹4.5 lakh. And this is only the coaching fee. It does not include travel, exam registration fees, or additional study materials."
Vishwanathan pointed out that nearly 35 lakh students appear for just two key entrance examinations—NEET and JEE. Yet the supply of premier seats remains limited. For instance, all Indian Institutes of Technology (IITs) together offer only 18,951 seats.
Because the odds of cracking these exams are so low, parents are drawn into an increasingly high-stakes coaching ecosystem with hefty price tags in the hope of securing the best possible preparation.
In the rush to secure admission, many parents overlook whether the programme is actually suited to their child's interests and capabilities.
"There is a herd mentality among parents," warned Sanjay Rahate, an internationally certified master career coach based in Mumbai.
"Competitive exams, from a neuroscience perspective, are heavily focused on information retention, rather than deep conceptual understanding. The majority of parents want their children to succeed in well-known streams, but they fail to evaluate what the child is actually capable of or how much intense psychological pressure they can handle."
Rahate pointed out another complication: the rise of artificial intelligence has made parents anxious about future-proofing their children's careers, pushing them to believe that only select fields such as technology or medicine are viable. The surge in demand further pushes coaching institute fees higher.
"If the child does not crack the exam on the first attempt, there is not only the crushing pressure of the money already spent, but also the financial burden of the coaching fee turning into a recurring annual cost," Rahate added.
"In this confused, fluid stage of shifting career paths, there are lots of fake programs coming up each day," warned Betty Ann Lijo, a 45-year-old edtech educator from Kochi.
"With exciting advertisements promising fake career prospects, they seek to exploit vulnerable parents and students. Parents, in their mission to provide the best, sacrifice their savings, time, energy, and even mortgage assets to fund these dreams, making educational exploitation a very real threat."
For parents, paying these fees is rarely a purely financial decision.
"There is a massive upward trend in demand that directly correlates with the expect...
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