The soaring costs of education over the past few years are putting a dent in expat parents’ budgets and causing young people to come out of university with significant debts that take years to pay off.
According to a study released by HSBC in 2018, sending a child to school in the UAE, from primary to university, will cost about $99,378 (Dh365,025), the second highest in the world. School fees in Dubai average from Dh12,761 to Dh65,152 per annum, not including additional fees for admission, transportation, school uniforms, books and extra curricular activities.
In Australia, the average tuition fee for “international” undergraduate students was AU$30,840 (~US$22,170) per year in 2018, and AU$31,596 (~US$22,700) for international postgraduates, with living costs running around AU$20,290 (~US$14,600) each year.
In the UK, parents of “international” students can expect to pay a premium on university fees. In 2017, the University of Edinburgh charged between £16,650 and £23,200 per annum undergraduate international students.
If you think that your children will be fine thanks to student loans, think again. Your children would have had to have been “ordinarily resident in the UK” for the full three-year period before the first day of the first academic year of their university programme in order to qualify for “home” status.
It doesn’t stop there: not only will they, as “international” students, be expected to pay over twice as much in annual fees than their UK resident cousins, but they’re also unlikely to qualify for UK government-sponsored financial student support, such as tuition fee loans, or, because of their British passports, qualify for certain scholarships and grants that are otherwise available to international students studying in the UK.
High-value courses such as veterinary or architectural degrees cost significantly more. An overseas student undergraduate medical degree can cost up to £38,000 per year. These figures don’t account for cost of living expenses and student union outgoings.
Safe to say education costs are going to be a significant chunk of your household expenditure. At an average annual increase of 5-9% each year, it will require a small fortune to put your child through college or university. Government loans, grants and scholarships account for only a small portion of today’s education costs. The great majority of the financial burden will fall on families, yet many parents aren’t actively saving for it.
These costs may come at a difficult time, when parents are anxiously saving for their retirement. With sound financial planning, parents can afford both university for their children and retirement for themselves. The key is developing the right strategy early and sticking with it.
There are a range of savings vehicles available to parents which provide capital growth over the medium- to long-term. The focus should be on saving whatever amount you can on a regular basis. With the right product, if you do run into difficulties you can simply stop your debit order and restart it again when you can. You don’t lose your money. Or, if you have a policy you can make it “paid up” which simply means you can stop contributing and leave the policy until the end of the investment term.
The more time you have to invest your money the more time it has to grow.
We can assist with finding you the right product to suit your needs, such as: