Education Fee Planning for Expats

In a recent survey conducted by HSBC into the best places in the world for expatriates to live, one of the criteria that the bank used to determine preferential nations was the expatriate respondents’ access to so-called ‘luxuries’ now that they had relocated. One of these luxuries was their access to private school education for their children. A destination that ranked particularly highly due to the level of luxury that expats had access to was Dubai – and yet Dubai also charges famously high rates for private school fees.

If you’re being relocated to a destination such as Dubai by your company, you may be lucky enough to have a remuneration package which includes financial provision towards covering the school fees for your children. However, such packages are becoming rarer and what’s more, if you’re choosing to move yourself and your family abroad, chances are your new employer will not feel that they have any obligation to sponsor your child’s education. What this means is that the financial burden falls solely on you. For English speaking expatriates moving to a nation such as Australia or Canada where their children not only have a right to state schooling but where the language of tuition is of course familiar to the child, the question of affording a private school education is not necessarily such a pressing one. However, if you’re moving abroad to a nation where the language of tuition is other than your own, or the method or standards of teaching are not appropriate, it may be essential for you to seek out educational alternatives for your child. And what’s more, should you lose your job and you don’t want to drag your children out of their chosen school, it makes sense to start saving as soon as possible towards the potential cost.

Private or State Schooling – Decisions and Potential Costs

Clearly every child is unique; as parents we all want our children to retain their individuality and to grow and develop into confident, independent, respectful adults with a wide cultural, social and educational awareness. Therefore every decision about whether a private school education is best for a child will be unique, and will depend upon many different factors. If you’re an expatriate, there are a number of points that are worth considering when determining the right path for the educational needs of your child. Here are some of the considerations you need to contemplate relating to whether a private school is suitable, or whether local state schooling will suffice: –

  • Are you in an environment where the local education standards differ greatly from the standards that you would like to achieve for your child? What choices are available to you?
  • Are you living in an environment that is less than 100% safe or stable for your child? Could this adversely affect their educational development? If so, what action can you take to protect your child’s educational requirements?
  • Culturally, morally or religiously, does the environment in which you live match your family’s beliefs and ideals? If not, what can be done to safeguard your child’s social welfare?
  • Are the educational, extracurricular and social facilities offered locally wide enough to encompass your child’s personal needs, talents and desires?
  • Is the language in your country of residence going to prove a barrier to your child’s development?
  • Do the standards of qualifications achievable in your country of residence compare favourably to the standards back home?
  • Do the standards of teacher qualifications in your country of residence compare favourably to the standards back home?
  • Is there a potential for the repetition of any educational or social disruption to your child if your job, or that of your partner, means that you will regularly have to travel or relocate?
  • How can you overcome any worry or anguish involved in potentially sending a child away from their family?
  • Do the best local schools guarantee places only to the best pupils?
  • Does your child stand a chance of getting the education they deserve?
  • Are you happy to leave your child’s education to chance and play the lottery of the state school?
  • If only those children who leave education with the best qualifications stand a chance of getting the best jobs, will your local, state funded school provide your child with the best chance to achieve the best qualifications?
  • Class sizes, teachers’ qualifications, facilities, availability of extra curricular activities for social and personal development.
  • Recognition, appreciation and ability to help special needs and specially gifted children.

Having covered these considerations, there are ultimately three clear points
that you and your spouse need to have in mind: –

  • You need to make sure that you understand how important it is that your child has a good education.
  • Then you need to understand what that means to you in terms of selecting the right school and the right schooling method.
  • Finally, you need to accept that it is down to you to take the responsibility of providing your child with the educational opportunities to set them up for life.

If private education is your decision based on your own personal circumstances, and having identified the right establishment for your child or children, the next issue to face is the cost and meeting that financial liability.

Fees charged in different countries and between different establishments vary massively. Carefully examine the registration, entrance and school fees together with boarding fees and extras when you research your preferred schools. If you have more than one child then obviously multiply costs applicably. Also, take into consideration inflation if you’re planning ahead for the education of a young child – and inflation in educational spheres is currently running at about seven and a half percent per year. Bear in mind inflation again when adding up the number of years your child will need schooling for, and you can quickly and easily come to a large and frightening sum of around £100,000 per child for average school fees alone.

Clearly the benefits of providing your child with the very best start in life may outweigh the costs, and if you want to start saving or want to put away a lump sum to cover the investment in your child’s future, today couldn’t be a better day to start. In this instance it really is a case of not putting off until tomorrow that which you can do today – after all, you clearly cannot afford to neglect your child’s future. There are specific savings & investment schemes that can allow you to grow your money towards affording to pay for your child’s education. The scheme you choose will depend on your personal circumstances of course, and factors to take into consideration will include whether you will need access to the money in the short, medium or longer term. A financial specialist adviser will help you identify the best solutions to meet your own specific requirements.

Higher Education for Your Student Child

Whether you’re going to have to pay to educate your child up to the age of 18 or your employer will, the vast majority of expatriate parents do have to face the fact that they will have to pay towards their child’s higher educational needs. In part this is because very few nations in the world now sponsor young adults through to University education, and even where there is some state provision, expatriate children are seldom eligible for it. In terms of the fees you will have to pay, they depend on a number of factors, for example the class of establishment your student child chooses, their chosen path of study, the country in which they want to study and whether they are going to be classed as an overseas student or not, and even the city in which they want to study.

If your child is heading for university, the total cost of a university education has doubled over the past five years, and the average university course is now 4 years in duration. When you combine the average cost of a degree per annum with living expenses and a few extras, most parents quickly realise that they will be facing an annual average bill of at least £20,000 per child.

Naturally the cost of obtaining a degree will continue to increase as more countries adopt the American system where, quite simply, the best colleges charge the highest tuition fees. The cost increase is likely to be further compounded as the state actively encourages our children into further education, and university places will come at a premium.

In the UK nowadays, 1 in 3 children enter higher education compared to 1 in 20 in the 1960s, and it may be fair to assume that this number will not reduce. Added to these facts, you have to take into account inflation of course – and the cost of education is currently growing way beyond the rate of inflation at around seven and a half percent per annum in the West. If you simply base your future figures on inflation alone, this could double the money required to finance your child’s higher education.

The good news is that there are a hundred-and-one ways to save for university fees – especially as an expatriate. Initial considerations relating to which savings or investment policy to choose should be made depending on the length of time until your child is of age to attend university, the amount of capital hoping to be raised, and the level of risk you are willing to subject your education fee savings to.

There are tax friendly options available to most people and an offshore & independent financial adviser used to working with the specific and unique needs of expatriates is well placed to assist you. If University costs are of concern to you, you can use the ´contact us´ form on page 3 and at the back of this guide, to receive details of who we can recommend to help you. Or you can of course email: [email protected]

Leave a Comment