Families investing heavily in higher education are seeing weaker financial returns, with some degree programmes costing up to Rs 34 lakh delivering average starting salaries of only Rs 4.74 lakh a year, according to a report by 1 Finance Global Economic Outlook 2026. The report found that many families are spending Rs 30 lakh to Rs 40 lakh on degrees that often lead to starting salaries of Rs 4 lakh to Rs 6 lakh annually.
The study has flagged growing return on investment (ROI) concerns in India’s higher education sector, stating that rising education costs, weak salary growth and a widening skills mismatch are reducing the financial value of several popular degrees.
According to the report, a four-year Bachelor of Technology (BTech) degree from a mid-range private college in Mumbai costs around Rs 17.3 lakh in tuition fees alone. Including prior schooling expenses, the total educational investment can rise to Rs 34.1 lakh. The average starting salary for a software developer was estimated at Rs 4.74 lakh per annum, with cost recovery taking more than 20 years after adjusting for inflation and living expenses.
The report said the number of AICTE-approved Master of Business Administration (MBA) institutions rose from 3,095 in 2021–22 to 3,465 in 2025–26, while quality job creation did not keep pace. Placement salaries reportedly declined at seven of nine top business schools in 2024. The report cited a nearly 15 per cent drop in average placement salary at IIM Indore year-on-year.
It also cited the Unstop Talent Report 2025, which found that 46 per cent of B-school graduates and 83 per cent of engineering graduates entered the market without a job or internship. The report further said Chartered Accountancy (CA) exam appearances doubled from six lakh in 2019 to 12 lakh in 2025, increasing competition. Entry-level fallback roles for semi-qualified candidates were estimated at Rs 3 lakh to Rs 5 lakh annually.
The report concluded that students and families need to focus more on skill relevance and employability rather than institutional brand alone, as rising costs continue to outpace salary growth. |
