University Fees

Expats living worldwide can benefit from many financial perks, a better quality of life and higher incomes and less Tax. However, being an expat can come with disadvantages, and funding children’s schools or university fees can be a big one. 

If you just so happen to live in the UAE, you only have an option of private education with costs soaring as high as $20,000 per year, depending on the school. Generally, parents fund schooling from their salaries; however, after they turn 18, comes university. This can take parents by surprise, but this is the one that you have 18 years to plan if you’re smart!

I know you don’t have a crystal ball but try and take the below factors into consideration:

• Where might your child go to university? For example, studying in Germany can be fee whereas Harvard Law School can be as high as $65,875 per annum (2020 figure)
• How many years do you think they may want to study? Courses ranging from 3 to 6 years can create a big difference in cost.
• What are the potential living costs? If this is something you want to fund on top of fees, then get some research done on the area and your children’s likely spending habits.
• Are there any potential benefits? Some countries do offer financial support to students, which can help lower the cost. Developed countries provide minimal support, which is also very rare for international students.
• Where your children are residents. The country your child is living in is increasingly playing a pivotal role in determining whether they pay “home” or “international” fees.

Planning for the UK

At the time of writing, UK universities often look for proof of 3 full years of UK residency to qualify for “Home” fees. As an example, Home students can expect to pay £9,250 in their first year at the London School of Economics in 2020, whereas ‘Overseas’ students can expect to pay £21,570 for the same year. Home fee-paying students can also benefit from a student loan which is unavailable for overseas students. People have mixed feelings regarding student loans. Mathematically it’s the best loan it’s possible to get as it only rises with inflation. Technically you pay the exact amount you borrow back in future when it’s affordable.

The UK system can tempt people to repatriate to help ensure their child qualifies for ‘Home’ fees. However, this can be more detrimental to their retirement than staying overseas due to earning potential and taxes. Repatriating to the UK might make very little difference from a financial perspective on families overall wealth. More than likely, it would mean a lesser retirement to ensure lower cost university fees.

Final Thoughts

Planning to fund your children’s university fees is like any other financial goal. First, figure out the future cost and work backwards. This will tell you how much you need to invest as a lump sum or more regularly to hit the target. 

Amongst other things, a good financial planner can help you calculate the inflationary effect on fees and then set up an investment strategy that fits your needs, then manage the investment ongoing.