Asian Indian parents prepare in advance for their children’s college education, but can they always afford it?


When it comes to saving and funding their children’s education, Asian Indians are among the best prepared, according to MassMutual’s College Planning & Saving Study. Almost half (49 percent) of Indian parents started saving for college before their children turned five, the earliest compared to all other multicultural groups in the survey. In fact, by the time a child is ten, 79% percent of Indian parents are saving for college, and one in five has saved $50,000 or more.

Culturally, Indians place a great deal of emphasis on higher education, which they consider fundamental to character development, as well as the gateway to a financially secure future. Moreover, most Indian parents believe their children’s focus in college should be on getting good grades, and not on figuring out how to pay for it. “Asian Indian parents consider it a duty to finance their children’s education,” said Evan Taylor, director of multicultural markets with MassMutual.

Asian Indians who participated in the survey emerged as less likely to rely on loans and government scholarships, preferring to pay for it themselves. Two-thirds are planning to pay for more than half of the expenses. Yet, only half of the parents surveyed are confident they will be able to afford it when the time comes. Their concern may be justified: A family with a 5-year old child entering kindergarten today can expect to pay an estimated $368,739 for private 4-year college tuition in 2030, according to the MassMutual college savings calculator.

While Asian Indians generally diversify financial planning with stocks, bonds and buying gold, saving early to fund their children’s college is a sensible choice. Parents in the study who started saving at birth or before their child’s first birthday had saved an average of about 40 percent more than those who began saving after their child turned 10.

However, more immediate financial priorities like childcare costs can overwhelm new parents who might find it difficult to save for future needs. The age of five is a crucial tipping point for savings. That’s when many parents can stop paying for childcare expenses and save those funds for college instead without disturbing their current spending habits. Even saving a portion of the childcare expenses can add up over 12 years; for example, saving $200 a week can total over $130,000 (with a conservative interest rate).

“Asian Indian parents are extremely savvy about saving for their children’s education. Starting early will help make it less stressful when their children are ready for college,” said Taylor. “We understand their commitment to delivering the best possible future to their kids and can help parents with financial options to make their planning easier.”

MassMutual offers five practical tips for Asian Indians to better plan and help pay for college:

Start early. Start saving what you can at birth, and for parents with child care expenses, increase the savings rate at age 5 by putting child care money towards saving for college.

Make it automatic. Set up automatic checking account or payroll deductions to an interest-earning savings account earmarked for higher education.

Encourage monetary gifts (including 529 plan gift cards) from family members and friends for college savings at Diwali and other gift-giving events.

Know how much you need to save. Estimate college costs by using free online tools such as MassMutual’s college savings calculator.

Protect your loved ones for unexpected events. Life and disability income insurance are solid considerations for parents.

To learn more about establishing financial goals for your child’s education, visit and the MassMutual College Planning and Savings study page.

MassMutual’s College Planning and Saving Study was conducted for MassMutual by New American Dimensions, LLC in December 2016 to examine the attitudes and needs of families related to education planning and funding. Qualitatively, twenty-two mini focus groups were conducted with five ethnic groups (Hispanic/Latino, African American/Black, Chinese American, Korean American, and Asian-Indian American) in English and in-language. Quantitatively, a 20-minute online questionnaire, conducted in English, comprised 1,750 interviews; within the total number of surveys, 150 completes were obtained for each of the 5 ethnic groups. Both qualitative and quantitative research was conducted with men and women age 30 to 64 with children age 5 to 15 for whom they are financially responsible. Respondents also met a minimum household income requirement ($50,000+) and participate in financial decision-making for their household. Results for the total were weighted to the 2010 U.S. Census distributions for ethnicity to be representative of American families in this age and income bracket.

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