TL;DR: Preparing your kids in the age of AI
In 2026, a degree alone is no longer sufficient for career success; currently, only 42.6% of Indian graduates are considered employable. As AI reshapes industries, parents must shift focus from simply funding degrees to securing a lifetime of “employability” through experiential learning.
Key Strategies for Parents:
- Invest in Human Skills: Build “future skills funds” for activities like robotics or debate to foster creativity and adaptability.
- Strategic Funding: Balance personal savings with education loans to avoid compromising retirement. Interest rates typically range from 8.25% to 12.5%.
- Diversified Portfolio: * Mutual Funds: Best for long-term growth and flexibility.
- PPF/SSY: Stable debt options providing guaranteed returns.
- Gold/Real Estate: Useful for diversification and inflation protection
By balancing traditional academic savings with investments in real-world skills, parents can provide their children with a genuine competitive edge
Imagine your child graduates with honours, only to discover their degree isn’t enough to land a job. This isn’t a dystopian future—it’s happening now. Recent data shows that only 42.6% of Indian graduates are employable, and with AI reshaping every industry, the gap is widening.
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A degree is no longer the destination.
Degrees will still matter—they signal credibility and structured learning. But here’s the reality: real-world experience is what truly sets candidates apart.
- With a CFA or a Master’s in finance, they can get this degree and become a financial analyst, but they can’t compete with GPT-5’s instant data models. However, they can translate such models into business decisions; they would be irreplaceable in the future.
- Take the case of two recent MBA graduates competing for the same role. Both had top marks, but one had spent weekends creating AI-powered social media campaigns. Guess who got hired?
- Having an MBBS degree makes them a doctor. Without the ability to connect with patients and build trust, even the best-trained doctor will struggle. AI will take over much of the transactional work currently done by doctors.
There are many other examples across different sectors; having your child prepared for the future is key for you as a parent when planning your kids’ education.
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Funding for Experiential learning and not just a degree
As the job market evolves, as parents preparing your kids’ futures, your goals should not just be to fund degrees, but to secure a lifetime of learning and reinvention. The ideal path would be to talk to a financial planner who can help you budget and invest for experiences beyond academic fees.
Here’s what forward-thinking parents are doing differently:
- Build skill funds: Think of experiences like debate teams, robotics clubs, or art classes not as luxuries, but as essential skill-building exercises. Create a “future skills fund” earmarked for them. These experiences would foster adaptability, creativity, and global awareness. These skills would be crucial for the dynamic job market that artificial intelligence will shape in the future.
- Balance strategy: With the rising cost of education, as a parent, you need to get away with the emotional baggage of funding it all on your own. You have to strike a balance between how much you should invest and how much you should rely on an education loan. Over-investing in your child’s education at the expense of your own retirement isn’t noble—it’s risky. Strike a balance between savings and strategic borrowing.
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Where Should Your Education Money Go?
Planning for your kids’ education in 2026 and preparing them for the future job market requires a broader understanding of the options available to parents today. Here are the current options available to you
Mutual Funds
- Generally, the most suitable option for long-term education goals.
- Offer liquidity, flexibility, and higher return potential.
- Best for parents who are comfortable with market fluctuations and disciplined investing.
Public Provident Fund (PPF):
- Two views: some avoid it due to lengthy lock-in and lower returns vs equity; others use it as a stable debt component.
- Suitable for conservative parents or those seeking guaranteed returns.
- Opportunity cost must be considered for long horizons.
Sukanya Samriddhi Yogna (SSY):
- Similar to PPF but specifically for the girl child.
- Offers attractive interest and tax benefits.
- Useful as a safe, long-term debt option, but may deliver lower returns compared to equity over long durations.
Unit-linked Insurance Plans ( ULIPs):
- Generally not recommended due to higher costs and lower transparency.
- It can be considered only in exceptional cases where lock-in helps prevent impulsive withdrawals.
- Choose cautiously and only after comparing with mutual funds.
Gold and Traditional Savings (RDs, SGBs, Gold ETFs)
- Useful for diversification and inflation protection.
- Should complement, not replace, long-term growth-oriented assets.
Should You Consider an Education Loan?
As discussed above, you need to strike a balance while planning for your child’s education. Education loans often carry stigma, but consider this: just as you’d take a home loan to invest in property, an education loan invests in your child’s earning potential. With starting salaries for IIT graduates averaging ₹20+ lakhs, the math often works in your favour.
Indian banks and NBFCs offer education loans. Tailored to students’ needs for domestic and international studies. The key things to consider are:
- Loan Amount & Interest Rate: Loan amounts range from ₹4 lakh to ₹ two crore, depending on the institute. SBI and Bank of Baroda offer loans to premier institutes (such as IITs, IIMs, and Harvard) at lower interest rates (as low as 8.3% for elite institutions). Typical interest rates range from 8.25% to 12.5%.
- Repayment terms: Education loans generally come with collateral up to ₹7.5 lakhs. Repayment starts one year after course completion or six months after gaining employment. Repayment tenures can stretch up to 15 years.
- Processing fee & Eligibility: Many mainstream loans have zero or minimal processing fees for standard courses and institutions in India. Some, like Tata Capital, provide unsecured loans up to ₹85 lakh and secured loans up to ₹ two crore, with eligibility for Indian citizens aged 18–35
Action points for Parents:
Whichever path you take as a parent, planning for your children’s education in 2026 is a critical component of your financial plan. You need to strike a balance while planning for it, and consider consulting a SEBI-registered investment advisor or Certified Financial Planner. The key actions parents can take are
- Start early and diversify investments using PPF, mutual funds, and dedicated child insurance plans.
- Review loan options from trusted banks and compare interest rates, fees, and repayment schedules.
- Fund extracurriculars, travel, or side projects to build transferable human skills and broaden future career opportunities.
The world your child will graduate into looks nothing like the one you did. But with thoughtful planning—balancing traditional savings with skills investment and smart borrowing—you can give them more than a degree. You can give them a competitive edge.
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