Education Fee Planning
The soaring costs of education in recent years have strained expat parents’ budgets and left young people burdened with significant debts that take years to repay.
COMPARISON
AUSTRALIA FEES
In Australia, the average tuition fee for international undergraduate students was AU$30,840 (US$22,170) per year in 2018, while international postgraduates paid around AU$31,596 (US$22,700) annually.
Additionally, living costs average about AU$20,290 (US$14,600) each year.
UAE FEES
According to a 2018 study by HSBC, the cost of education for children in the UAE, from primary school to university, averages about $99,378 (Dh365,025), making it the second highest in the world.
In Dubai, school fees range from Dh12,761 to Dh65,152 per year, not including additional costs such as admission fees, transportation, school uniforms, books, and extracurricular activities.
UK FEES
In the UK, parents of international students face premium university fees. In 2017, the University of Edinburgh charged international undergraduates between £16,650 and £23,200 per year.
STUDENT LOAN RULES FOR INTERNATIONAL STUDENTS
Parents might hope that student loans will ease the financial burden, but this isn’t always the case. To qualify for home status and receive student loans, children must have been ordinarily resident in the UK for three years before the start of their university program.
International students not only pay over twice as much in annual fees as UK residents but are also unlikely to qualify for UK government-sponsored financial support. This includes tuition fee loans and certain scholarships and grants available to UK citizens. High-cost courses such as veterinary or architectural degrees are particularly expensive, with overseas undergraduate medical degrees costing up to £38,000 per year. These figures exclude living expenses and student union fees.
FEE PLANNING
Education costs are a significant household expenditure, with annual increases averaging 5-9%. Covering these costs requires substantial financial planning. Government loans, grants, and scholarships cover only a small portion of today’s education expenses, leaving the bulk of the financial burden on families. Despite this, many parents are not actively saving for their children’s education.
These costs often arise when parents are also saving for retirement. With sound financial planning, it is possible to afford both university education for children and retirement. The key is to develop the right strategy early and stick with it.
A range of savings vehicles is available to parents, providing capital growth over the medium to long term. Regular saving is crucial, and the right product will allow flexibility if financial difficulties arise, such as pausing contributions without losing money. Some policies can be made ‘paid-up,’ meaning you can stop contributing and leave the policy until the investment term ends.
The more time you have to invest, the more your money can grow.
HOW CAN WE HELP?
We can assist in finding the right product to suit your needs, including:
- Premium Bonds or other NS&I products (UK)
- ISA (Individual Savings Accounts) (UK)
- Education Bonds (Australia)
- Mutual Funds (Worldwide)
- Education Savings Accounts (Worldwide)
- Family Trusts (Worldwide)
- Gifting (Worldwide)
- Retirement Plan Loans and Withdrawals (Worldwide)
For education fee planning and investment advice, we always recommend consulting with a reputable financial adviser to create a plan for your family’s future.
