Many parents are underprepared for the cost of supporting their child through a degree
More than three quarters of parents around the world would consider sending their child abroad to university, but many underestimate how expensive it is. The true cost far exceeds the amount they say they are willing to pay, according to HSBC’s Value of Education research.
This suggests that many parents need to start planning in earnest to bridge the gap between their expectations and reality – or face disappointment in due course.
The US is the most respected destination for international study, with parents in countries including China, Canada, the UK and France saying that the country offers the best education. But it is also one of the most expensive places for international students, with an undergraduate degree costing around USD165,000 including tuition and living costs.
Parents recognise the benefits of an international university education for their children, but often underestimate the costs
Parents in the UK say that they would be prepared to pay 18 per cent above the costs of a UK degree to send their child to study abroad. In reality, if they wanted their child to study in the US, they would need to pay 74 per cent more than for a UK degree. Parents in China say they would be willing to pay 28 per cent extra to send their child abroad, but an undergraduate degree in the US would cost 223 per cent more than an undergraduate degree in China.
The UK is the second most well regarded destination for international study, according to the Value of Education research. In Malaysia, parents rate the UK as the country offering the highest quality of education. They say they would be willing to pay 44 per cent more for an international education, but in reality sending their child to study in the UK would cost 382 per cent more than a Malaysian degree.
On average, the true extra cost of sending a child to study abroad is more than six times greater than the extra amount parents say they would be willing to pay.
The Value of Education reports also show that many parents are underprepared for the financial cost of supporting their child through a degree: 22 per cent of parents say they have not started saving towards their children’s university education.
Charlie Nunn, Group Head of Wealth Management, HSBC, said: “Parents recognise the benefits of an international university education for their children, but often underestimate the costs associated with such an opportunity. Tuition fees are not the only costs to consider: living expenses in the country and air fares home are additional charges families will need to cover. Starting to save early, and seeking professional advice, can help parents unlock the benefits of university education abroad for their child.”
The Value of Education is a global consumer research study which explores parents’ attitudes and behaviours towards children’s education. It is based on online surveys carried out by Ipsos MORI for HSBC in 16 countries and territories around the world. The latest Value of Education report containing further background on methodology is available at http://www.hsbc.com/about-hsbc/structure-and-network/retail-banking-and-wealth-management
The total cost for students in each country is the sum of the average annual university tuition fees and the average annual cost of living, multiplied by the average number of years required to complete an undergraduate degree. Annual tuition fees data for each university are either sourced from the university website, by phone via their admissions departments or from other credible websites. The average cost has been calculated separately for both domestic and international students. The annual cost of living for students in each country is sourced from: www.expatistan.com (assumed to be the same for domestic and international students).
The extra percentage that parents would consider paying to send their child to university abroad, compared to the cost of a domestic education, is an average calculated from responses to The Value of Education Learning for life report published in July 2015.