Funding higher education: Indian parents vs US NRIs

Indian parents often send their children abroad to study due to the steep private education system in their home country. They manage to fund their children's higher education through loans or their own savings. In contrast, American Indian parents face higher costs, especially in the beginning of their child's education, but these costs decrease as the child progresses through the system. Daycare and pre-school in the US can be prohibitively expensive, making grandparents often the ones to step in to help.

American Indian parents are strategic when it comes to their children's education, relying heavily on the good quality public education system. If they can afford it, they opt for private schools which come with guaranteed admission to a reputed school without any extra cost. In India, private schools proliferate to meet the demand, with costs soaring from nursery admissions.

The IRS 529 plan in the US allows parents to fund their children's education, offering tax-free withdrawals for qualified higher education costs. Indian parents tend to open these accounts early to accumulate funds. In India, convincing parents to invest in growth opportunities and equity funds for higher education is a challenge due to the lack of tax benefits.

Unlike Indian colleges, US colleges look for 'spike', or extraordinary and proven capability in a chosen area. US children are aware of AP system in high school, taking multiple AP exams which grants them college credits. This saves costs and time, providing them internships and job opportunities. Indian high schoolers, on the other hand, spend a lot of time and money on specialized coaching for competitive exams. Only privileged few enjoy financial concessions if they study in-state in public universities.