Can you keep up with the costs of international schooling?
Parents in non-English-speaking countries are increasingly sending their children to international schools, pushing up prices. So what can you do if you want the best education for your child?
Schools that teach in English, also known as “international schools”, are becoming increasingly popular around the world. The International School Consultancy (ISC) Group, a research firm based in the UK, says there are currently over 7,000 such schools worldwide, and predicts that, over the next decade, this figure will rise to over 12,000.
This demand is being driven not by expatriates, as in the past, but by wealthy local parents, says Nicholas Brummitt, ISC’s chairman. He explains that a high-quality, English-speaking education is seen in many countries as the best way to improve your chances of getting into a top university. According to his firm’s research, 80 per cent of the demand for places at international schools now comes from local families.
“Today there is a massive demand for English-speaking education all over the world,” he says. “The future growth of international schools is now very much dependent on how many people can afford to pay international school fees.”
As demand for places outstrips supply, so fees will inevitably rise, and in some places there is already a very high level of competition among parents.
In Hong Kong, for example, there are 49 international schools, and many sell certificates, known as debentures, to parents who wish to guarantee a place for their child. These can cost up to HK$10m (around US$1.29m), and although they are usually repaid once the child graduates, this is not always the case – and any such repayment won’t usually include any interest.
Yet even debenture places are running out at the top schools. At the Hong Kong International School, for example, where annual fees are up to HK$218,000 (around US$28,000), the debentures cost HK$2m (around US$258,000) and are already fully subscribed.
Similarly, in Dubai in the United Arab Emirates, many of the top international schools are at full capacity with waiting lists. The number of Emirati nationals choosing to send their children to international schools has risen by 34 per cent over the past decade, says ISC, and the same trend is evident across the Middle East.
Financing your child’s international education
If you want to give your child an international education then, more than ever, it is important to start planning as soon as possible. There are numerous sources of information online that will help you to establish what fees to expect from international schools in your chosen location, so it is worth taking the time to find out what you can expect to pay – and to consider how this will be affected by inflation by the time your child is ready to enrol.
For example, medium-priced boarding schools in the US and UK currently charge at least US$40,000 a year (for tuition and accommodation), and the most expensive will typically charge more than US$50,000.
Once you have established the total likely cost of your child’s education, you then need to consider how you will arrange for sufficient funds to be available at the right time and in the right currency, in order to pay the necessary fees.
For example, if you intend to send your child to a school where fees are payable in US dollars or euros then you may wish to open a savings account in one of these currencies, to ensure any interest you accumulate on your savings is in the currency that you will ultimately need, and will therefore not be affected by exchange rates when it comes to be used. Our International Reserve Account, for example, can be opened with as little as £1, €1 or US$1.
How Barclays can help you plan your child’s international education
If you are thinking about arranging an international education for your child, Barclays International Banking can help you in a number of ways. For example, we can help you to plan your savings and currency transactions so that you have sufficient funds in place – in the right currencies – to pay school fees as they arise. If you have a Relationship Manager1, we can also refer you to one of our expert advisers in investments and/or currency, to provide you with specific guidance tailored to your circumstances.
It is important to appreciate though that investments can fall in value as well as rise. You may get back less than you invest. Please note also that we cannot provide you with advice on investments when you are in the United Kingdom.
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Educating your child abroad
Children are increasingly being sent to international schools for an English-speaking education– especially from families with international lifestyles. We investigate the financial implications of doing this, and suggest ways to start planning if you wish to educate your child abroad.
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