Studying abroad is exciting, but an international move can feel overwhelming for both parents and students, especially when it comes to pre-departure preparations and managing finances across borders.
To put this into context, according to ICEF Monitor, a market intelligence resource for the international education and student travel industry, the number of international students studying overseas is set to grow at an average annual rate of 4.2 per cent by 2030, with UK universities expecting to see a 46 per cent rise in international undergraduate applications by 2026.
While international education remains a top aspiration for families around the world, the decision-making and relocation process can be complex. This is what I hear from countless customers, clients and colleagues from around the world who feel the pressure that comes with sending their child to study abroad.
The financial considerations
Funding an international education is often the primary concern for families. To better understand the anticipated or actual expenses of an overseas education, we conducted a quality of life report, where we spoke to 11,230 affluent adults aged 25 to 69 in 11 global locations.
A four-year degree overseas can cost up to $256,000 (£191,000). This includes tuition and accommodation fees, as well as additional expenses such as health insurance, regular flights and everyday allowances.
To cover these costs, over half of the parents (51 per cent) surveyed said they would pay for their child’s international education from their general savings, 22 per cent would take out a loan and 20 per cent say they would pay by selling assets. This uncovers the great lengths parents are willing to go to in affording an international education for their child.
We are seeing these money worries globally. Three in five (60 per cent) parents in Hong Kong say they lack sufficient savings to fund an international education for their children, while parents in India and Indonesia are willing spend between 20 and 66 percent of their retirement pot to fund their child’s international education.
Let’s think about that for a moment; parents around the world are willing to commit more than half of their pension to support their child’s aspiration to study abroad. This can explain why the majority of respondents (90 per cent) who are preparing to send their children overseas for education say they lack confidence in their financial preparations.
However, with the wealth of support available to both parents and students, such drastic measures are not necessary. For parents who are thinking of supporting their child to study overseas in the future, consider investing in a savings plan with strong interest rates sooner rather than later.
It can take up to 10 years to save the amount needed to fund an overseas education for your child, so long-term financial planning is key if your client is concerned about cash flow shortfalls.
For parents preparing for their child to study abroad in the immediate future, I recommend setting up mobile or online banking where you can link direct debits and transfer money to their child overseas.
