Planning for university education can be stressful for both parents and their children. Higher education has become increasingly pricey over the years and the average person, unfortunately, does not always have the money to pay for university fees. Rabha Ashry talks to Phil Carrington, the senior vice president at GlobalEye, the wealth management firm, about how best to plan for college and its expenses.
1 Start planning as early as possible
According to Mr Carrington, there are quite a few programmes that you, as a parent, can use to save up for your children's education. "[These] range from basic plans that simply spread the total cost of college across the number of months remaining, right through to sophisticated investment vehicles that will take advantage of the financial markets." Such programmes are well worth looking into as they will enable you to finance your children's education without incurring any extra cost or debt. The earlier you start planning for your children's education, the easier it will be to pay for the universities of their choice.
2 Hope for the best, plan for the worst
You should not count on your children's ability to secure scholarships, however remarkable they may be. Universities are becoming more and more competitive and scholarships are increasingly hard to secure. Instead of putting pressure on your children to excel, you should plan years in advance. "Making the right financial arrangements today will mean that the decision whether to go on to higher education can be decided on ability, not financial standing," Mr Carrington says. "Planning in advance can mean financial freedom for yourself, while at the same time providing an excellent start in life for your child."
3 When it comes to higher education, there is no compromise
In today's increasingly competitive world, having a good university degree has become crucial. As Mr Carrington says: "Most parents want the best start in life for their child. Of all the benefits you can provide, none has a more lasting value than a good education at a school or university where your son or daughter will be happy and successful. And in today's increasingly competitive world, where higher education is seen as the key to success, it is natural that we should want our children to make the most of their learning opportunities."
4 Student loans should be treated as a last resort
It is not as bleak as it sounds if your teenage son or daughter got into the college of their dreams and you are unable to bankroll their average four-year degree out of your own pocket. If you were unable to plan ahead for their education, you have the option of looking into acquiring a student loan. A student loan is often low in interest and does not have to be paid back until the student has graduated from university and gained full employment. Many banks in the UAE offer student education loans, such as Barclays, Abu Dhabi Islamic Bank and Abu Dhabi Commercial Bank, to name a few. Student loans are reasonable as a last resort, although it will force you to take on a significant debt and the extra cost of interest rates.
5 Some universities do offer financial aid and generous scholarships
However, you should keep in mind that it is not a good idea to put all hope into this possibility. Plenty of universities in the UAE offer discounts for students who excel in school, such as American University of Sharjah, while there are some universities, such as Khalifa University, that are free of charge for remarkable students. Some universities, such as New York University Abu Dhabi, promise financial aid to any student who gets accepted into the university. Of course, financial aid and scholarships such as these are very competitive and difficult to come by and students who are able to secure them are often the exceptions rather than the rule.
6 Children should do their part to minimise the cost of a university education
Students should look into keeping a budget and perhaps getting part-time jobs. Living off-campus with parents is often the cheaper option, as well as taking advantage of meal plans made available at university dining halls. For entertainment, students should take advantage of activities available through their university because they are often much cheaper than other options available outside the college.
