All parents want the best for their children. Giving children the right education and access to opportunities is one of the most essential roles that parents try to fulfill. Education is a significant factor affecting career path and income, and is becoming increasingly more important. Universities are considered as the final financial commitment in terms of education for parents. At the same time, this is also the most expensive form of education. In this blog, we will review key findings and statistics gathered by various sources.
Key findings HSBC report 2015
The report is representative of the views of parents worldwide, as can be seen in the graphic below which shows the participating countries. Parents in the UAE have also contributed in the survey conducted by HSBC.
When parents were asked if they were willing to pay 25-50% more on their child’s university education if it was an international degree the majority of all Asian parents answered yes. In the top 6 all countries are from Asia and this shows that this is an important consideration for parents when they decide which university their child should attend. 52% of the parents in UAE were also willing to pay 25-50% more if their child’s university education is international. Below graph shows an overview from the countries considering to pay extra for their child’s education if it is an international university.
Key findings HSBC report 2016
In the 2016 report conducted in the same countries 3 out of 5 parents said that they would take on debt to fund their children’s university education. 49% of parents say funding their children’s education is more important than contributing towards their own retirement savings. 84% of the parents pay for their child’s university education.
78% of parents are primarily funding their child’s education from day to day income.
Let’s look at the tuition fees at different countries, which are popular destinations for students.
A bachelor degree tuition can cost $11,300 - $22,958 a year on average. However, tuition is not the only cost. Parents also pay for the living expenses and a calculation below shows how this can add up with inflation.
Based on the above calculation parents will pay around $147,702 for a 3-year bachelor degree and not all bachelor degrees are only for 3 years. After completing a bachelor most students would aim to get a master’s degree, which is also frequently funded by their parents. On average parents pay for a master degree $23,520 - $79,317 in the US and Canada this excludes inflation and living expenses.
All parents want the best for their children and education is part of their responsibility to provide. When we apply for jobs and promotions, we are qualified against our peers and our education matters. Many parents are not aware of the true cost and therefore 78% is paying it primarily out of their day to day income. Only 13% of the parents in the UAE have set up proper funds for their child’s university education in advance. A bachelor and master’s degree with cost of living can cost parents up to $250,000 with inflation. If parents save for 10 years monthly $1,769 with 5% compounded growth they will have the funds available for a $250,000 education, as an example. Therefore, it is important for parents to take this into account while planning for their children’s future. The earlier you start, the less burdensome it will be to give your children all the opportunities they deserve.
Source: ‘reproduced with permission from the value of education, learning for Life, published 2015 in 2015 by HSBC holdings plc.’
Posted on Mon, February 13, 2017
by Simon Snelder