At the rate education costs are escalating, tertiary fees can become exorbitant by the time our children are ready. It is no wonder less than half of Singaporean parents are financially prepared for their children’s education based on a survey conducted by OCBC Bank in December 2013.
Tuition fees for local universities are estimated to inflate at 3.5 percent per annum, whereas the increase in fees at overseas universities such as the US, UK and Australia, can range from 4.8 to 5.9 percent. If we include living expenses and airfare (for overseas universities) which will also inflate at estimated 3 and 5.3 percent per annum respectively, the total amount can become a huge financial strain if proper planning is not done.
Annual tuition fees for NUS, according to their website, are $9,000 for the average course of study.
Assuming an average course is 3 years = $27,000 total fees.
Assuming education inflation of 3.5% for 20 years = about $50,000.
Hence, when it comes to planning for our children’s education, start early with an education plan. It is essentially an endowment policy, in which we receive a lump sum at maturity. Some of these policies pay out a sum of money once every few years. This will ease our worry of not having sufficient funds to pay for our kids’ education in the future.