How to cover the cost of an overseas university education

When Anthony Schoombie’s daughter went to university in South Africa, he had no savings to fund her and she had to rely on loans. Having moved to Dubai last year, he is now able to save for son Alex’s education – but the family is playing a massive game of catch-up as Alex is already 16. “The dynamic has shifted considerably as an expat and the climate for saving is a lot better,” says Mr Schoombie, 47, an IT consultant. “We would have thought of student loans before for university. But I fully understand we are not going to be able to get to the full number by the time he jets off three-and-a-half years from now.” Covering the cost of education for university aged children who want to study overseas can be a tall order for many UAE residents. Mr Schoombie has put aside $10,000 (Dh36,725) for his son’s education after selling up in South Africa, and is now saving Dh5,000 a month to augment the fund. Alex wants to study in Australia or New Zealand, where he has family, and Mr Schoombie is paying for a life coach to help him think about what field to study, with a view to career counselling later. He also hopes that, as a strong rower, Alex will benefit from a scholarship. At the other end of the scale, Briton Adam Zargar, 39, a life coach who has lived in Dubai since 2007, is saving $1,200 a year for his first child, a son not due to be born until July. “It’s so important to prepare,” he says, “and compound interest is the key.” Peter Davos, founder and managing director of Hale Education Group, a GCC educational consultancy specialising in American higher education, says it is crucial to “start saving early” rather than “scrambling to cover the cost”. “It has consistently surprised me how poorly parents prepare to fund their children’s university education here, only thinking seriously about it a few years before applying,” he says. “This is much too late.” It is common in the United States, he says, to create a 15-year, or longer, savings plan with recurring monthly contributions. Total cost of attendance for a US university can range from $35,000 a year up to $75,000 for a private university in a “major gateway city” such as Boston or New York. But while US universities tend to be among the most expensive in the world, they are also the most generous in terms of aid, he says. About 20 universities, such as Harvard and Princeton, offer “very generous needs-based aid” to families making up to $200,000 per year. Australian Tuan Phan of non-profit investment community SimplyFI.org, is saving $1,000 a year for each of his two children, aged 18 months and two-and-a-half. That should give them around $35,000 when they turn 18, he calculates. As there are no education savings accounts in Australia, he is pooling the money into his own savings account until the family repatriates. The "top-tier" University of Melbourne costs from A$25,000 (Dh66,000) for an arts or education degree up to A$60,000 for medicine, he says, but there are a lot of scholarships and bursaries, particularly if his daughter wanted to study a degree in sciences, technology, mathematics or engineering. Fiona McKenzie, director of education consultants Gabbitas Middle East, focuses on helping students get into British universities. The majority of children in the UAE would be regarded as international students, she says, and annual tuition fees can therefore range from £10,000 (Dh47,950) for the London Met to almost £53,000 for Cambridge. Medicine has become more expensive since the country's National Health Service stopped subsidising international students, she says. Each university will send individual fee status questionnaires to determine for themselves whether a student meets UK residency criteria, in which case fees are capped at £9,250 a year. The rule is that the student needs to have been "ordinarily resident" in the UK for three years before starting a degree. “You can see why parents are keen to get home status,” says Ms McKenzie. Universities will review employment circumstances of the parents, for instance whether their contracts are permanent or temporary, how many return visits they make to the UK, whether they have UK property and can demonstrate a plan to return long term. In one recent client’s case, says Ms McKenzie, the student was given home status by two universities “without question”, sent a questionnaire by one and had two other universities make an international offer. When planning how much university will cost, Charles Bonas of Bonas McFarlane Education takes a holistic view. He advises parents to count on supporting their children for another six to eight years from the age of 18. “The days when you would do a university degree, finish at 21, get on the milk round of graduate recruitment schemes and start at a City bank in London at 21, 22 are over,” he says. Graduates today are most likely to go on to do a post-graduate degree, then a low-paid internship and it could be a “good number” of years after graduation before they can “stand on their own two feet”. “You want to give them enough financial assistance to end up doing a career they really enjoy and have a foothold in a career they’re really happy with,” he says. “Parents rush to finish, to get to the end, but it can be catastrophic for students, who spend the rest of their life wishing they had done an architecture rather than a biochemistry degree or drop out.” The dropout rate of UAE students who go to UK or US universities is quite high, he says, so it may be better for a child to do their first degree in the UAE, where parents can “help instil good study habits” or to take a gap year. “The most expensive mistake parents will make is to send their children to a university they will then leave,” says Mr Bonas. For instance, he says, it is not essential to do a finance-related degree if you want to work in business and a lot of people studying law will not become lawyers. Often, he says, a liberal arts or humanities degree from a good university is a better choice, with the student not required to decide a career path until the end of their undergraduate education. Fred Wobus, 44, has worked in Abu Dhabi as a systems engineer for the past 18 months. He has £3,000 saved for his son, 3, and aims to save £1,000 per child per year, with his second son just weeks old. As a dual citizen with British and German passports, he has a creative plan for his children’s education: to teach them German with a “strict bilingual regime” so they can study in Germany, where education is free. “I’d love them to spend the money I save up on facilitating their own financial independence,” he says, “rather than feeding a commercialised university education industry in the UK, US or elsewhere. They provide woeful value for money, if you ask me.”

How to cover the cost of an overseas university education

UAE parents reveal their saving strategies to ensure they can afford their child's location of choice