Written by 'Nimi Akinkugbe - Nigeria
Twitter/ Instagram: @MMWITHNIMI
Nimi Akinkugbe has extensive experience in private wealth management. She seeks to empower people regarding their finances and offers frank, practical insights to create a greater awareness and understanding of personal finance.
For thousands of Africans studying abroad as well as the thousands aspiring to join them, the devaluation of the currencies is a major setback and will inevitably force parents to reconsider their children's overseas education plans. Here are a few ideas to consider as you navigate the challenges of the increased education costs.
The key to successfully educating children is preparation and planning from their earliest years. Many parents do not plan for this huge expense until the bills are almost due. Putting in place an educational savings plan with direct debits from your current account to an appropriate investment vehicle will help keep plans on track.
By some estimates, annual increases in education costs can be as high as 10% to 15%. An education-planning calculator helps you to visualise various scenarios assuming savings over a period of time. It will help you to determine how much to put into the education fund on a regular basis in order to meet a particular goal. You can create different scenarios by entering different data as appropriate. Remember to factor in exchange rate changes if your children are to be educated abroad.
Are all your savings and investments in local currency? Exposure to a diversified currency portfolio typically reduces exchange rate risk. It is important, particularly if you have obligations in foreign exchange to hold some foreign currency in your domiciliary account, or in a diversified portfolio consisting of bank deposits, bonds, mutual funds and real estate.
Remittances for school fees, student maintenance allowances, Business Travel Allowance (BTA), and Personal Travel Allowance (PTA), are among the eligible requests for foreign exchange that shall be fully met by The Central Bank at the official/interbank exchange rate.
Scholarships and grants are often overlooked by parents. From your children's earliest years you may have identified a unique skill or talent, sporting, artistic or academic, making them eligible to compete for scholarships. Scholarships may be tied to a particular field of study or may require that a certain standard of performance be maintained throughout the student's enrollment. They may not cover the entire school fees bill but will certainly offset some of the expenses.
For many families, it is an economic necessity that children contribute towards the funding of their education by working full time and taking advantage of distance learning opportunities or by enrolling in part-time courses. If you are considering your child getting a job, do confirm that there are no student visas restrictions regarding working in a foreign country. Student loans are also available but depend on a number of factors including country of origin, employment, existing credit history, and so on.
Do you have to send your children abroad? Unexpected fee increases, exchange rate fluctuations, and other unpredictable circumstances make overseas education increasingly challenging and for most African families, planning for a local education remains the most practical option. Combined with temporary immersions through travel, summer camps or exchange experience, and with strong input from parents, many young people do exceedingly well without going abroad early. Indeed not every child thrives far from home and for some children the experience could be fraught with emotional and cultural challenges.
A firm foundation comes from a solid education and it is every parent's duty and desire to give their children the best possible start in life. It is equally important for parents to carefully consider what is best for their children in the context of their own family situation. It is important to strike a balance between giving your children a decent affordable education and ensuring that in your bid to educate them you don't wipe out your retirement savings and end up becoming dependent upon them.
Africa has witnessed over the years, aggressive marketing by overseas institutions visiting African cities to woo "lucrative" international students; these institutions must consider introducing ways to ease the pressure including limiting the increase in tuition fees for the duration of a student's enrolment. Some have already developed 'condensed' programmes that make it possible for students to complete their course content earlier than the traditional three or four-year degree courses or the two-year Master's programmes. These options offer flexibility and reduced expenses, but sometimes cause students to be under undue pressure, as they must forego important school breaks to gain extra credits. Waivers in certain subjects are also possible where transcripts show prior learning in the same or similar subjects, and at an appropriate level. Some institutions offer discounts for paying fees for a full session and rent in advance.
It is gratifying to see educational establishments offering world-class education locally, yet tailored to nurturing outstanding African children in an African context. "Now is the time for the government to look inwards and focus on building and increasing the number of high-quality educational institutions from primary to tertiary level," said Bolaji Osime, CEO Global International College. It is our hope that the educational sector will be a top priority for both the private sector investors and the government so that all African children can receive a decent education locally that can equip them for the future.