Attending university can involve a significant financial commitment
Parents are willing to make big sacrifices for the sake of their children’s education. They invest time, energy and money – and some even risk their own financial security – to give the next generation a good start in life.
This respect for education is entirely understandable. Education opens doors. It equips young people with the skills they need to navigate the world and live an independent, fulfilled life, not least by helping them find a rewarding job.
The majority of parents want their children to go to university. But an undergraduate degree alone may not be enough to stand out in today’s competitive – and increasingly global – job market. That may be why HSBC’s latest Value of Education report Foundations for the future found that 88 per cent of parents would consider postgraduate study for their child.
Parents with a child in university or college spend an average of about USD7,600 each year supporting them
Yet those years of study come at a price. While some countries and institutions offer free tuition, others charge up-front fees. Undergraduates from England and Wales, for example, pay up to GBP9,000 (about USD13,000) each year depending on where they study. Tuition fees at some US universities are more than USD40,000.
Accommodation, clothes, food, laptops and smartphones add to the bill. And airfares are a further cost for those who wish their children to study abroad, an option which has more than doubled in popularity since 2000 (see box).
1) More than 4.1 million people globally studied abroad in 2013, up from two million in 2000
2) The four countries sending the largest numbers of students abroad are:
South Korea: 116,942
3) The four most popular destinations for international students are:
US: 19 per cent
UK: 10 per cent
Australia: 6 per cent
France: 6 per cent
Source: UNESCO Institute for Statistics. Read more on the UNESCO website about the Global Flow of Tertiary-Level Students.
Some students contribute towards these costs by combining study with paid work or student loans. But parents often end up bearing a significant burden. Our survey found that parents with a child in university or college spend an average of about USD7,600 each year supporting them.
In places such as the UAE, Hong Kong and Singapore, this rises to more than USD15,000 a year. This is a big commitment, and it’s bigger still for those with several children. Families may need to make hard financial choices, balancing the cost of study with other demands and ambitions.
Many people say that they would put their children’s needs above their own if they were forced to choose. Half of parents think that contributing towards the cost of their child’s education is more important than saving for their retirement, for example, and nearly a third think helping with tuition is even more important than meeting their mortgage payments. And 60 per cent of parents in our study would be ready to take on debt.
In one sense, this reflects the best aspects of parenthood. It shows the lengths to which people are prepared to go to support their children and the sacrifices they are willing to make. But it also underlines the importance of thinking ahead.
Though there is no easy solution, planning may help parents support their children without compromising their own long-term financial security. It could mean making small, regular savings, seeking professional advice on investments, or researching the student loans and scholarships available. Above all, planning starts with a frank and clear-sighted assessment of the education a child is likely to want and need in five, 10 or even 20 years’ time.
Everyone wants to see their children develop and flourish. By planning ahead, parents can lay the right foundations for the future and help the people they care about achieve their ambitions.
Read more about the HSBC report The Value of Education Foundations for the future in our press release.