Parents not saving enough for kids’ education: Survey

Survey cites poor saving habits and financial planning

An increase in tuition fees at schools and universities across the country is affecting parents as a new study revealed the failure of UAE parents to effectively plan their children’s education.

In a survey by HSBC Global Research, UAE parents were found to have high aspirations for their children, but a majority did not financially prepare to meet their children’s education goals. Almost all parents use their current income to fund education expenses, citing poor saving habits and unsustainable financial planning.

“Parents are relying entirely on their current income to support their children’s education. If they lose their job, affording education can become a challenge, ” said Ishrat Kiyani, Regional Head of Wealth Sales, Mena, HSBC Bank Middle East Limited.

Four out of five parents believed paying for their child’s education was the best investment. However, 67 per cent of the surveyed parents wished they had started saving earlier.

“There are a number of schools opening up (in the UAE), but they are businesses which have to be profitable. As time goes by, education will become very expensive,” he added. School operators in Dubai have continually asked for greater allowances in fee increase which has not helped parents in financial planning.

Interestingly, the study also revealed 65 per cent of parents want their children to study abroad, with the UK, US and Canada ranking as the top countries perceived to offer high quality education.

The survey examined the views of over 4,500 parents with higher income from 15 countries. It included 300 parents from the UAE, who have at least one child under 23 currently pursuing education, and are solely or partially responsible for making decisions about their child’s education.

With many schools expressing their intent to raise fees, parents find it hard to juggle expenses to meet education costs of their kids. “Costs of everything, including school fees are going up. How am I to save for my children’s education. It’s a monthly exercise to manage funds,’’ said Karthik Biswas, a concerned parent of a 10-year old.

Meanwhile, the government is working to improve transparency as fee hikes are being considered by most schools. A periodic review of the school fee system is being done to ensure fees don’t shoot over the roof, keeping in mind interests of students and school managements.

Latest statistics show expenses of private schools in Dubai have increased by 1.74% last year, with salaries for teachers making up 60 per cent of their total expenses. Rents, maintenance, electricity and water take up the remaining 40 per cent. The Dubai Private Schools Group (DPSG) recently approached the Knowledge and Human Development Authority (KHDA), which supervises the running of schools in Dubai, for a rethink on education costs and how they are regulated.

“In appeals, first to the Ministry of Education and later to the KHDA, we highlighted a potential and growing issue should things not change. All Dubai schools face this issue, even many that have served the community for decades,” a spokesperson representing the schools said.

Schools argue that according to KHDA’s Dubai Private Education Landscape report, 42 per cent of the student population pays less than Dh10,000 in annual tuition fee. Parents, however, complain that this is not the case as these schools set a limit on student intake. It’s an issue of cost and supply.

‘‘We are running out of options for affordable education and this puts a strain on budgets,’’ said S.V., mother of a 14-year old girl who did not wish to be named.

Dubai’s 158 private schools generated around Dh4.7 billion last year .

muaz@khaleejtimes.com