Mar 04, 2014

    Should you send your child abroad for studies?

    Some parents may want to explore all possible options before making a decision

    TYPE in "college costs" on Google, and you get suggested search options like: "College costs too much" and "college costs out of control".

    College is another term for university in the United States. But rising costs are a problem not confined to there. Britain's National Union of Students, which represents over 600 student unions, petitioned the government and universities recently to control spiralling costs for international students.

    "Each year up to 175,000 international students in our campuses find their fees increased, often without notice, reason or support," the petition read. "These increases in fees are unfair, and exploit international students. They put the academic success of many international students at risk each year."

    A Singapore student who signed the petition claimed that her tuition fees at King's College London's law school rose from £14,000 (S$29,700) in 2012-2013 to £15,000 in 2013-2014.

    "This was an unexpected rise in fees, and since my mother became unemployed recently, it made our financial situation even more difficult. I have two part-time jobs," she wrote.


    The student's circumstances are unfortunate, but the petition is unlikely to succeed. Universities face rising costs, and it is politically easier to charge international students more, instead of making local students pay. Singapore too has sharpened the distinctions between citizens, permanent residents and foreigners.

    Singapore parents who want to send their kids abroad will have to deal with ever-increasing fees and higher costs of living, especially in big cities like New York or London.

    After converting to Singapore dollars, tuition fees for undergraduate engineering courses at Imperial College London, a school popular with Singaporeans, are at $55,000 a year. Medicine courses can go up to $80,000 a year. Minimum living costs in London, including food and rent, can easily hit $2,000 a month.

    A three-year British university education can thus easily cost $250,000 today.

    Assuming an all-in school fees and living costs inflation rate of 3 per cent a year and no fluctuations in exchange rates, the parents of young children today can expect to pay at least $400,000 per child for a British education 15 years from now.

    In Australia, costs are slightly lower, but annual tuition fees can cost around $40,000. In a city like Melbourne, living expenses can easily add up to $30,000 a year. So, we are looking at above $200,000 for a three-year education today.

    In the US, costs will vary widely depending on the school, course and location. Tuition can range from $25,000 a year at public universities to around $60,000 a year at private colleges. Living costs can add another $20,000 a year. A typical four-year education there can thus cost $200,000 to over $300,000 today. In 15 years' time, costs might hit half a million.

    By contrast, local university tuition fees for citizens are currently at just $8,000 a year. There is no rent to pay if students live with parents.

    So, should parents splurge on an overseas education for their children?

    One can argue that if a wealthy family can easily afford an overseas education, then the answer is a no-brainer. But there are other considerations. Children could eventually end up living far away from their parents.

    To be able to have an extra few hundred thousand dollars on hand in 15 or 20 years' time is also no mean feat.

    Some parents dip into their nest eggs, even selling their Housing Board flats. But before doing anything extreme, they should explore all possible options.


    For many schools, financial aid is available. But international students who apply for aid might find it tougher to gain admission into the school they want.

    It might be better to start inculcating a certain spirit in children. Getting good grades in school can lead to scholarships, which might even provide for an all-expenses-paid overseas education.

    A willingness to work to defray living expenses will also lessen the burden. More importantly, a child who understands his or her parents' financial circumstances will not demand to use their retirement savings to study abroad.

    But bringing up an understanding and independent child is easier said than done.

    The course of education children choose is also critical. Some countries have low education costs, notably Germany, where university education in some states is even free. There are courses conducted in English as well.

    Exchange programmes offer another solution. Temporary immersion in a different land will reap the intangible benefits of studying abroad at a lower cost.

    Finally, there is debt. Student loans are usually available. But the ability to get a decent-paying job to repay the loan quickly is important. Parents can also lend money to their children.

    All in all, the decision to send a kid abroad for further studies is not a light one to make.

    Unexpected fee increases, exchange rate fluctuations, and other unpredictable circumstances such as parents becoming unemployed or falling ill can combine to make costs unaffordable.

    For most families, aiming for a local education, with an exchange experience tagged on, is still the best compromise to make.