Plan Now For Your Child's Education

Contact Faramond Group at expatlife@ to learn more about how you can establish a dedicated education savings account.

by / Published: 15 Jun 2017

Plan Now For Your Child's Education
Photo: iStock

“If you think education is expensive, try ignorance.” This sentiment, first recorded over 100 years ago., indicates that the cost of a private education was already a matter of concern over a century ago. But anyone with children in private schools for the last 10-15 years doesn’t even need to look that far back to recognise that school and university fees increase by more than the headline rate of inflation.

Unless you have children, you may not have noticed the pace of school fees inflation over the past years. Tuition fees for high school age students at some of Kuala Lumpur’s international schools have increased from 2010- 11 to 2016-17 as such (excluding deposits, application fees, registration fees and any other fees the schools may charge):

Alice Smith: RM51,030 to RM80,040
(7.79% increase p.a.)
Australian International: RM46,748 to
RM73,500 (7.84% increase p.a.)
British International: RM54,756 to
RM101,130 (10.77% increase p.a.)
Garden International: RM54,810 to
RM87,540 (8.12% increase p.a.)
International School KL: RM73,150 to
RM93,050 (4.09% increase p.a.)
Mont Kiara International: RM84,746 to
RM113,308 (4.97% increase p.a.)

Fees at these prominent international schools have gone up between 27 and 85 per cent in the last six years alone, an average annualised inflation rate of 7.26 per cent! If you started saving today, you would need to put away around RM8,000 per month for the next 18 years to fully fund the school fees of one child (assuming the average school fees inflation remains constant, and the growth rate on your savings is the same 7.26 per cent per annum).

To demonstrate that the rising cost of education is not hampered by little things like recessions, we attempted to get the data going back to the year 2000. That was around the time that the bubble burst in tech stocks, followed shortly by the 9/11 attacks in New York, and then a global recession. The International School of Kuala Lumpur (ISKL) was the only one able to provide us with the fees from the 2000-01 academic year: RM46,240 for high school age. This means that over the last 16 years, fees at ISKL have increased by 4.47 per cent p.a. – only a slightly higher rate than the 4.09 per cent increases during each of the last six years.

It may not surprise you to learn that the rising cost of academia is not limited to secondary schools. Leading universities in the UK, Australia, Canada and the USA have shown that annualised increases in tuition are less than at international secondary schools. The increase in their tuition fees from 2000-01 to 2016-17 are as such (with the exception of University of Oxford, whose data is from 2005-06):

Harvard University: $24,407 to $43,280
(3.64% increase p.a.)
University of Oxford: £9,960 to £15,295
(3.98% increase p.a.)
University of Southampton: £6,900 to
£16,054 (5.42% increase p.a.)
University of Minnesota: $12,987 to
$22,210 (3.77% increase p.a.)
McGill University: C$16,418 to C$31,888
(4.24% increase p.a.)
University of Melbourne: A$9,600 to
A$28,288 (6.99% increase p.a.)

On average, annualised increases in university tuition have been less than those at international secondary schools. At each university, these tuition fees are for foreign students, and demonstrate the drawing power of universities in English-speaking countries. England has always been a popular destination for international students, while the growth of economies throughout Asia has seen Australia – by virtue of its geographic proximity – become a ‘go-to’ country for Asian students.

Putting it all in perspective, in order to send a child to Oxford University in 18 years, you would need to save £300 (ca. RM1,700) per month for the next 20 years to fund only the cost of tuition for one child.

Whether private schooling or university, education is not cheap and the prices are only heading in one direction (HINT: not down). To put it succinctly: if you have children, it is imperative that you begin planning today.