Educational cost consists of two major components – private cost and institutional cost (Tilak, 1985). Institutional cost of education mainly refers to government spending on education. Private cost of education refers to resources incurred on education by students themselves and/or by parents, any other household member, and/or any of their relatives. The latter is also called household expenditure on education. Both institutional and private costs of education entail visible and opportunity costs. The institutional visible cost consists of two major components i.e., recurring and non-recurring expenses, whereas tuition and non- tuition expenses are the major components of private visible cost. The opportunity cost, on the other hand, denotes the relationship between scares resources and choice. The institutional opportunity cost refers to the loss of potential gain from investment on other alternative sector, when governments choose to invest on education. Similarly, the private opportunity cost refers to foregone income when students choose to participate in the lab or market instead of pursuing education. Investment on education from both the government and household sources assumes importance given their magnitude, nature and characteristics. Although public investment provides educational facilities, utilization of these facilities is determined by household investment (Tilak, 2002). Hence, both individual and institutional investments are imperative for from the view point of optimal allocation of resources to education.

educational expenditure, higher facilities, investment, resources, utilization