Research by Zurich International Life Limited, Middle East (Zurich) shows the cost of education UAE resident families are facing is AED933,945 (USD253,962) throughout the educational lifetime of a child. The figure, which excludes compound interest rates, is based on the total cost of education of two years at pre-school, six years at primary school, six years at secondary school and three years at a British university
In the UAE, pre, primary and secondary school costs add up to an average of AED528,390 (USD143,682) per child. These costs exclude other fees such as the cost of books, trips and uniforms. Additionally, these costs could increase by up to 40% for top tier schools.
Tertiary education fees differ by country, for example the average yearly cost of tuition in Australia and Canada is AED55,163 (USD15,000), while the US has annual fees averaging AED84,428 (USD22,958) per year. UAE-based universities average AED76,492 (UD20,800) per year, while in the UK it costs an average of AED57,000 (USD15,500) annually.
In addition to upfront costs of education, basic living expenses raise the costs even further, with accommodation, food, utilities, travel and day-to-day living expenses all adding to the burden on families. These extra costs equate to as much as AED234,551 (USD63,780) for one student over a three-year UK course, according to research published in 2015 by the University of Edinburgh.
The Financial Impact
“A typical family with two children could look at spending as much as AED2 million on education,” says Amrita Sethi, Head of Marketing and Communication for Zurich International Life, Middle East.
“While some employers in the UAE contribute to education costs at primary and secondary level, the majority of people are left having to pay these costs themselves, with 70% of parents funding their child’s education from day-to-day income, according to HSBC’s recent The Value of Education Foundations for the Future report. The report also revealed parents based in the UAE spend the most on children’s education compared with other parents globally. It’s a huge expense that, without proper savings and financial planning, is very difficult to meet and often at the opportunity cost of planning for other important goals, such as retirement,” says Sethi.
Alarmingly, HSBC’s report also revealed 64% of parents would be willing to get into debt to fund their children’s education and 41% of parents think funding their child’s education is more important than contributing to their own retirement. “Adding up the costs may seem overwhelming at first, but the good news is committed financial planning will help families achieve these important saving goals. Start your savings plan sooner rather than later, spread the costs over the long term and remain disciplined and committed,” advised Sethi.