It is the season for 18-year-olds to leave home to go to college. My friends in India have accepted that a steep private education system is preferable to a punishingly competitive and scarce, even if highly reputed, public college. It is not uncommon for Indian parents to send their children abroad to study and pay the higher cost either through loans or their savings. How do Indians in the United States manage and fund their children’s higher education?
Very interestingly, the cost curve for par ents in the US has high front-ended costs, and lower costs as the child moves into the school system. By contrast, In India, costs are lower in the beginning and rise as the child grows older. Childcare in the US can be prohibitively expensive, cutting into the ability of a young couple to save for the future. It is not uncom mon for grandparents to chip in and help the young parents, given both scarcity and high cost of daycare and pre-school. In India, paid in-house help or daycare is a preferred solu tion that is both cost effective and plentifully available. The relative cost advantage curve turns in American Indians’ favour soon after.
