How to plan for your children’s education fees

How to plan for your children’s education fees

With the prices of children’s education soaring worldwide, education fees are a key factor to be accounted for in your financial planning, just like acquiring your family home or retiring.

While many European countries offer free primary and secondary schools of adequate quality, in most developing countries, a quality education means you must go private, and international schools are particularly expensive, as they must deal both with local and international educational standards and hire high-earning teachers from English-speaking countries.

Below we’ve compiled a list of international school fees in some of the main Asian markets for international workers. Fees rise as children move from elementary towards high-school, so the lower end of the range is for early years at the more economical schools, whereas the higher end is for high-school at pricier institutions.


Country Yearly International School Fees
Hong Kong HK$70,000 – 220,000 $9,000 – 28,000
Singapore S$9,000 – 36,000 $6,000 – 26,000
Philippines PhP150,000 – 410,000 $3,000 – 9,000
Thailand THB180,000 – 560,000 $3,000 – 16,000
Dubai AED17,000 – 65,000 $5,000 – 18,000
Japan Y1,300,000 – 2,600,000 $12,000 – 24,000

As you can see, education fees in Hong Kong, Singapore and Japan are higher than education fees in Dubai, the Philippines and Thailand, thanks to higher costs of real-estate and labour.

If your employer pays for your children’s education costs that may provide some breathing space. However, it’s likely you will still have to deal with university fees. And remember that if your children have lived out of your home country for much of their lives, they may not be eligible for local, often regulated, tuition rates.

For instance, in the case of education fees in the UK, for a medical degree, that can mean paying over 4 times as much, going from £9,000 to £37,000 per year!


Country Yearly University Fees for International Students
UK £15,000 – 37,000 $21,000 – 50,000
USA $30,000 – 60,000 $30,000 – 60,000
Australia $20,000 – 63,000 $15,000 – 47,000

Education fees in the USA – home to some of the most desirable universities – are highest of all. Education fees in the UK are regulated and lower for UK residents, but British universities make up for that by leveraging their centuries-old reputation and charging overseas students at market rates. Education fees in Australia, which came onto the market for international students more recently, are somewhat more attractive, but Australian universities offer a high-quality, English-speaking education, they lack the brand appeal of the Ivy League or Oxbridge.

Of course, on top of this, you can factor in around US$30.000 for room, board, living and travel expenses per year. So supporting your children through a 4-year course can cost anywhere between US$180.000 and $360.000 each – an amount that is comparable to buying investment real estate!

Strategies for Education Fees Planning

Given that you have to build up a portfolio in the several hundreds of thousands to meet these education fees, how should you go about it? Here are a few tips

Start early.

There’s no reason why you can’t start saving for your children’s university education fees the very day that they are born. In fact, if you know you are looking to have children, you can start saving even before they are born. This gives you three main advantages:

  • First: each year, your savings will be a smaller cut of your income. Assuming for a moment that interest rates are zero, saving $360,000 over 18 years is already $20,000 per year, which is by no means pocket change. If you tried to do it over 4 years, it would be $90,000 – difficult even for very affluent professionals.
  • Second: your savings will compound over a longer period of time, which means that, even at the low interest rates of today, more of those fees will come from interest (your money working for you) than out of your income.
  • Third: with an 18-year runway you can afford to take on a little risk, because if markets a volatile, you still have time to recover. And that risk allows you to earn a higher expected return over the overall period. Whereas if you are only saving a few years in advance, you should invest more conservatively, which would also mean lower returns. In practice, this means that if you have a longer investment horizon, you can tilt your portfolio more towards stocks, property and alternative investments than towards low-yielding government and corporate bonds.

Save regularly.

Calculate how much you have to save each month until your children are off to university, and try to stick to the plan by saving every month. Having a routine is more reliable over the long term than saving from one-time events such as bonuses or property sales.

Ring-fence savings for education fees.

While this is not strictly necessary, it is helpful as a tool to keep you aware of whether you are on-track to support your children through college, especially if you have difficulty committing to saving. Set up a separate account or fund and determine that you won’t make withdrawals from that for current expenses, holidays and so forth. That account is exclusively for saving for education fees. That way you can make a mental commitment to add a certain amount to that account each month. Watching the balance grow year-by-year will be very comforting.

Talk to a financial advisor.

In order to determine the most appropriate kinds of investments for your education fee savings pool, it might be an idea to talk to a financial advisor. They can advise you on minimizing taxes and fund management expenses, as well as picking the right funds, and can help you stay on track over the years.

Plan ahead to minimise education fees.

As an international worker, rather than going for the default option of keeping your children in international schools until they graduate and then paying high international tuition fees in a country such as the UK or the US, if they still have several years until college, it may pay to think a little outside the box:

  • One option is for them to return to your home country a certain number of years ahead of time in order to be eligible for local university fees. This could pay off even if it means extra living expenses or paying for private schooling.
  • Another option is to consider other countries and universities in addition to those in the UK and US. As we have seen, Australian fees are lower. In some continental European countries such as France or Germany, your kids would have to learn the language, but there are highly respected universities with fees for international students that are more in line with those of locals. In fact, some universities in countries such as the Netherlands now offer courses in English in order to attract international students.
  • Research scholarship options. You shouldn’t depend on one of these, and they vary in terms of flexibility, but they can help make ends meet. They often require a fair amount of bureaucracy, so it is good to know about them a couple of years ahead of time.

Get the children on-board.

While of course you don’t want your children going to night-school and flipping burgers all day, most of us agree that getting children and teens to do some work can be character-building. Their teenage contributions won’t make a huge dent in the overall budget, but they will help a little, and at the very least they will allow them to appreciate the effort and expense that is going into their university tuition, and will make a nice addition to the application essay. So get your kids putting that spare room on AirBnB, teaching English as a second language, doing some freelance work on a platform such as Upwork, or taking on a summer job at a local business.

As education fees continue to rise worldwide, planning and saving for them, especially for university fees, is increasingly important. By applying these common-sense strategies, you will be able to comfortably see your children through to graduation. If you have further questions on education fee planning, or even education fees in specific countries, contact a specialised advisor.


CHRIS LAND, FINANCIAL ADVISOR

Chris has 9 years’ experience as a UK pension specialist and licensed financial advisor. He specialises in helping clients make balanced financial decisions to grow their personal wealth.

Chris is licensed with Globaleye, an award-winning international financial advisory firm established in 1999, with 10 offices and 15,000 clients worldwide.


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