Costs of Education

 Cost of Education is the cost incurred by the Government and the household sector on education.

It is further divided into two parts:- Private cost and Social cost

(1) PRIVATE COST:- Private cost is incurred either by the individual, or parents or both. It is further divided into:- Direct Private Cost and Indirect Private Cost.

Direct Private Cost is the expenditure incurred directly by the household for the education of individual. It is the expenditure on schooling borne by the household. Besides expenses on fees, books, stationary and equipment, boarding and lodging payments, conveyance, transport and entertainment those on private tuition and coaching as well as pre-admission expenses are also included.

Indirect Private Cost measures the opportunity cost of earnings foregone by the student because of joining an educational course. It is also termed as Hidden Cost. It values the time that student has allocated to studies. It quantifies the value of leisure foregone in pecuniary terms directly. Hence, it is measured in terms of foregone earnings.

(2) SOCIAL COST:- Social Cost refers to the expenditure incurred by the institution or/and govt. for providing education that is not directly recovered from students. It is further divided into:- Recurring and Non- recurring Cost.

Recurring Cost, as the term implies, recurrs regularly. It can be defined as the cost which an institution or/and Govt. spends on operating or maintaining the education system. It is calculated annually. It includes expenditure on salaries and allowances of teaching and non-teaching staff, scholarship and stipend paid to the students, repair and maintenance of building and equipment, hostel expenses to the extent they are not covered by fees, costs for conducting games and sports activities as also conducting examinations and expenses on consumables and contingencies.

Non-recurring expenditure of capital cost is one-time expenditure. It includes expenditure on land and library purchases, construction of buildings, purchase of furniture and equipment and other durable items.

Social Cost does not consider the expenses and efforts made by the individual to complete a particular course.