December 2010 | www.selectasset.com
International Private Education Fee Planning

Select’s financial planning consultants frequently meet with clients who are parents of school age children or who are planning to start a family in the future.  Can you guess which topic is near the top of their financial planning priorities? It’s the funding of private education – covering, in many cases, all the years from elementary school to college graduation.  During these meetings there are often shocked faces once the large sums involved in education fee planning are better understood.

This article summarizes four topics that you should consider when doing due diligence on the financial implications of private schooling.

1) Are You Likely To Be Paying For It?

While it’s impossible to give individual advice in this article, you should be aware that the odds favor you having to finance almost all of your children’s educational fees. Yes, there are some fortunate individuals who follow career paths where overseas expatriate assignments include the payment of international school fees. However, these ideal circumstances are becoming quite rare as international companies look to control costs and take advantage of local hiring.  In addition, many expatriate education packages do not cover more than a few years in any one location and may also set limits on the number of children covered per family and the amount of tuition paid.

The key message here is to take personal responsibility for your family’s educational fee planning as early as possible.

2) What’s The Return On A Private School Education?

For many families, answers to this question are the main driver behind their decision to ‘go private’. Four of the ‘Return on Investment issues’ often raised by anxious parents are:

  • Will my children be encouraged to excel academically? (Parents want to see both good exam grades and success with prestigious college applications.)
  • What’s the student / teacher ratio in each class?(Parents usually expect this to be much lower than in public schools.)
  • How much choice do we really have when selecting a private school? (This is a delicate issue because the amount of choice is on a case-by-case basis. For example, someone on a 3 year assignment to China may have a very different choice of international (English-speaking) private day schools than an executive moving from London to Singapore.)
  • Although my children are bilingual, English is their second language.  What support is there for ESL students?”  (Many schools and colleges do offer extra support for such students because it’s in their financial interest to encourage international students to enroll. Still, it’s worth checking on the details of what exactly is available beforehand.)

3) Get Creative at Paying For Private Schooling

For those who will have to carry most of the private schooling burden alone, there are a number of options to check well before any education fee planning decisions are made. These include:

  • Checking if the targeted schools accept payment in multiple installments.
  • Applying for financial aid from the school (usually done after the student has been accepted.)
  • Making use of a monthly fee payment service – there are businesses who specialize in this area although not all schools support such arrangements. 
  • Seeking professional financial advice on the merits of starting a savings plan aimed at meeting future private education fees. (This is an area where consultants at Select have much experience.)

4) Consider the ‘Unthinkable’

Although school fee planning is a valid course of action when preparing for the future, it implicitly assumes that life will carry on much as before.  However, there really are no certainties in life and unfortunate dilemmas (e.g. poor health, divorce, unemployment) can occur quite suddenly.  That’s why it’s also advisable to review life and health insurance coverage when you’re mapping out your savings plan for education expenses.

There is a lot of preparation required when planning for your children’s educational future. Select’s team of experienced financial consultants is ready to discuss your requirements in complete confidence and map out specific plans for you to put into immediate action.