United Nations employees: will you be able to afford a university education for your child?
Written by Carl Turner on February 22, 2018.
One of the great benefits for working for the UN is that most contracts cover children’s school fees which is a great benefit and a huge boost to potential savings.
However, I have been working with UN clients in Asia for nearly 10 years now and find that a much-neglected area is that of university fee and living costs planning.
If you haven’t looked at university fees lately, you might get something of a shock, especially if, like me, you are a Generation Xer who paid nothing for their degree!
A lot has changed over the last 20 years with university fees massively outstripping inflation in many countries. In the US, for example, the Consumer Price Index revealed a 63% increase in college tuition and fees between January 2006 - July 2016.
So just how much will it cost you to send your kids to university?
The UK currently tops the global table for the highest tuition fees. Home students pay an average of £9,188 - home students being UK nationals who have lived in the the country for at least two years prior to enrolment. If your children haven’t, as is the case for many expat families, then they will be classed as international students. That’s not great news because, according to the Times Higher Education World University Rankings, ‘In 2017, international students paid between £10,000 and £35,000 annually for lecture-based undergraduate degrees. An undergraduate medical degree can cost overseas students up to £38,000 per year.’
And that is just the fees. Your child will also need money for rent, bills, books and general living costs. I have written about this subject in my book, 12 Steps to Financial Success for Expatriates, and produced this table to compare how different countries match up.
You may be wondering how on earth anyone manages to afford a tertiary education with figures like those. Well basically, there are two main ways. The first is by clocking up debts. The average US student graduates with $37,172 of debt. That’s some burden with which to start your working life, especially when wages have been stagnating while living costs rise. It’s not surprising that many graduates carry their debts right through to middle age with 39% of borrowers not paying off student loans until they are over 50! Clearly that will have a detrimental affect on other financial planning goals throughout their lives such as saving for a deposit on a house or accumulating a pension.
The alternative is that you, as a parent, could do some forward planning. Of course, you may not yet know where your child will choose to study in the future but that’s no reason to do nothing. My advice is always to plan for a worst-case scenario if you can – it’s not like the money will ever go to waste! If you are lucky enough to have excess savings once university is paid for, any left over cash could be put towards the deposit on a house or used to set your child up in business if they turn out to be a budding entrepreneur.
Putting in place an education fee plan is genuinely one of the best gifts that you can give your child, one which will have a hugely positive financial impact with long lasting benefits. Obviously, the earlier you start saving, the better. While your children are going through school gaining the knowledge and qualifications required to secure them that university place, your savings can be gaining interest so that when the time comes, you will be able to give them the best possible start in life: a university education without a huge burden of debt.
If you work for the UN and you would like some help with university education fee planning, I’d be more than happy to sit down and talk through your situation with you to work out some clear objectives and suggest the best regular savings products to help you achieve them. Please feel free to contact me at email@example.com