UAE parents spend 140% more on children’s university than global average
Parents residing in the United Arab Emirates spend the most globally on their children’s education, 140 per cent more than the global average recorded in other countries, a new report has found.
The report, titled The Value of Education: Foundations for the Future, is based on the findings of a survey conducted by HSBC bank across 15 countries, including the UAE and Egypt from the MENA region.
The survey questioned 6,241 parents, 400 of whom are in the UAE, about the aspirations they have for their children’s higher education and the challenges they face achieving them. The results found that parents in the UAE have high ambitions for their children, with 89 per cent wanting their children to pursue an undergraduate degree and 85 per cent wanting them to continue and go for a postgraduate degree.
Nearly 60 per cent (58 per cent) of expats in the region said they wanted to send their children abroad to study; they represent the highest figure globally after Indonesia.
“A higher education that is international in scope has become a requirement for those seeking top careers in today’s competitive, increasingly global job market. Parents are looking to an education abroad to give their children an advantage, because it provides international work opportunities, foreign language skills and exposure to intercultural experiences – skills that are valued by employers around the world,” said Karen Bauer, regional director for Education USA, a US Department of State initiative aimed at attracting students to study in the United States. It now comprises a network of 171 education centres around the world.
“However, parents need to have a long-term plan in place to enrol their children abroad, especially as the costs continue to rise,” Bauer added.
The research found that medicine was the most popular field of study parents would like their children to pursue abroad, followed by engineering, computer science and finance. However, new field of study are on the rise, given the changing demands of the job industry.
“I had a group of Emirati students looking at management of amusement parks,” Bauer told AMEinfo, recalling that it might have been for the management of the IMG Worlds of Adventure, the world’s largest indoor theme park, which opened on Wednesday in Dubai.
Other Arab countries are even looking at education programmes to revive their educational sectors with new, younger blood.
Volatility in global economy might have hit different sectors at different times, but one field that continues to grow and rise, against all odds, is education. In fact, the sector is getting more expensive.
For instance, the average college tuition in the United States, a globally popular destination for education overseas, rose 1,225 per cent between 1978 and 2012, representing an increase surpassing 280 per cent in the US Consumer Price Index during the same period, according to Bloomberg data.
UK and Australia follow the US in popularity respectively.
The number of students from the MENA region pursuing higher education in the United States rose 1.3 per cent during academic year 2014-2015, reaching 103,307, out of which 2,887 were Emirati students, Bauer said, citing data from the US.
Thus, ambitious parents of the UAE are certainly feeling the pressure, with 75 per cent saying their children’s education makes it difficult to keep up with other financial commitments, the survey found.
This does not just apply to higher education, as 72 per cent of parents with children still in primary school are also feeling the pressure. The cost for primary schools starts from AED7,000, but could go up to more than AED100,000 per academic year.
So, even when choosing to not send their children abroad to learn, higher education in the UAE does not come at a cheap price either.
While college tuition in the home countries of many UAE residents is cheaper than that of the UAE or other abroad destinations, Kunal Malani, head of Customer Value Management in UAE and MENA, Retail Banking & Wealth Management, HSBC, said that with “most of us being high-earning expats,” the idea was viable.
So, despite all of the pressure, these individuals are willing to sacrifice anything and everything for their children’s higher education, including going into debt. The data found 22 per cent of parents in the UAE are willing to cut back on everything except for their children’s education.
For that reason, there is an increasing need for expert advice in this regard, especially for parents who may not have been wise enough to start saving early in the child’s life. There has been a 25 per cent increase in clients taking up the HSBC Education Programme solution over the past year, Gifford Nakajima, regional head of Wealth Development, Retail Banking and Wealth Management for HSBC Middle East and North Africa.
More than half of UAE parents looking to send their children abroad for higher education are even looking to invest in property in that particular country, the HSBC report found.
However, all of this can only happen with the right saving plan.
“Parents naturally want the best for their children and hope that a strong education will put them in the best position to lead prosperous life. Of those in the UAE looking to send their children abroad, half (52 per cent) would even consider investing in a property in that country. However, the choices in terms of fields of study and the level of education parents hope their children will gain, coupled with the cost of education and accommodation, indicates there is a mismatch in aspirations and financial preparedness,” Nakajima said.
“Parents can take proactive steps towards planning by looking more actively at investing in savings accounts designed for education instead of getting into debt, while others can look to instill a greater sense of responsibility amongst their children by encouraging them to play a role in financially supporting their own higher education. It’s no longer just about starting early, but you also have to safe wisely,” Nakajima added.