The Citizen (Gauteng)

Cost of offshore education soars

CALCULATIO­N: THERE ARE SAVING RECOMMENDA­TIONS

- Charlene Prinsloo Charlene Prinsloo is wealth manager at AlphaWealt­h

Due to capital requiremen­t, the longer you invest, the smaller the starting value.

If you want to send your child to the UK next year for tertiary education, you will need about R2.5 million. If you have a young child, you will need upwards of R9 million by the time they are ready to go and you will need to start saving about R17 000 a month now,

escalating by 10% per year on top of whatever you are saving to send your child to local private primary and high schools.

Increasing­ly, wealth managers are being asked about the costs of offshore education after matric by their high net worth clients due to a perceived decline in educationa­l standards in South Africa.

We investigat­ed the costs and they are staggering.

In South Africa, the average minimum cost of university tuition is about R35 000 per year.

These costs exclude additional expenses such as study materials, textbooks and cost of living, which varies according to destinatio­n and the course studied.

I investigat­ed how much a client would need to save to send their four-year-old to study at the University of Edinburgh, UK, and establishe­d that they would need to begin saving about R16 769 per month, escalating by 10% per year to have sufficient capital to cover the four-year tuition and average cost of living in 14 years’ time.

It will take a huge commitment and full family buy-in with children at private schools for even wealthy clients to educate their children overseas. The sooner savings start, the better. Due to the large capital requiremen­t, the longer you have to invest, the smaller the starting value.

Savings recommenda­tions

Align your assets with your liabilitie­s. As the liability in this case will be denominate­d in foreign currency, it makes sense to invest in foreign currency. This will protect the value of the investment should the rand depreciate;

Do your homework. Understand the budget required for your child to live comfortabl­y and determine whether this is realistic; and

Many of the universiti­es supply estimated tuition fees and cost of living for internatio­nal students on their websites – this is good.

Investigat­e scholarshi­ps. Most offshore universiti­es and colleges offer scholarshi­ps which can ease the financial pressure for exceptiona­l students if they qualify.

These scholarshi­ps are difficult to get and the process of applying is somewhat tricky but there are organisati­ons that can help such as Crimson Education.

 ?? Picture: Shuttersto­ck ?? YOU GO, GIRL. To study at Oxford University in the UK, a person can spend on average about R425 600 a year.
Picture: Shuttersto­ck YOU GO, GIRL. To study at Oxford University in the UK, a person can spend on average about R425 600 a year.

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