Dealing With The Rising Costs Of Education Of Your Child In Singapore
The cost of education in Singapore is rising very fast. It is increasingly becoming a problem for families to offer their children the opportunity to the best education. For instance, in the past ten years, Singapore has seen the cost of education increase 21% faster compared to core inflation.
Education is becoming more expensive than most aspects of life that are have already hit the ceiling. Most parents are making education a top priority for their children and willing to spend colossal sums to ensure they get knowledge. Paying for private tuition or enrichment classes is adding to the cost of education on top of education fees.
Costs involved in education in Singapore
When you begin paying for education, the costs are normally not that high, but they grow gradually. Usually, you can begin paying low monthly fees at primary school where it costs around S$6.50 a month. The costs are usually low because very few students need tuition in the early years of school. Typically the cost of education from primary through to O Levels will be around S$2,156. Parents will begin to struggle with rising costs when their children begin going for tuition and attending college.
Although data regarding tuition costs are limited, subjective reports indicate that on average tuition can cost between S$150 and S$400 per subject per month. This can even be more, and five subjects will costs a minimum of S$750 per month.
At the tertiary level, the costs are even higher with a college junior required to pay S$792 for two years, and in polytechnics, the cost is as high as S$2,900. University costs are far higher. For instance, ay the National University of Singapore, the cost ranges from S$29 to S$146,750 relative to a course one is studying. On average, a parent will spend around $97,000 on the education of a child.
Cause of the increase in education costs
Since 2007 Consumer Price Index increased by 24% and has remained stable since 2013 compared to the cost of college tuition. University tuition has been increasing faster than CPI growth which has resulted in education being expensive. Singaporean have to pay more now for education compared to other needs such as transportation and food.
- Competition for available slots in institutions
Increase in tuition costs in universities and tertiary institutions could be a result of various factors such as demand and supply. The number of students has overly overgrown relative to the available slots in institutions. The institution may be facing lower admission rates, and that might be the reason for hiking costs. For instance, between 20o7 and 2014 admission rates to publicly-funded degree courses increased by over 5%. Equally, other post-secondary institutions also experienced an increase.
- Change in Government subsidies
In Singapore, government subsidies play a vital role in making education affordable to its citizens. There is a possibility that the cost of education is growing because the available subsidies are not able to keep up with growing education demand. Education expenditure grew between 2007 and 2014 by 47% to S$11,719. Recurrent expenditure for colleges and universities has grown even faster by 77%. It shows that the government is trying to spend more to keep up with the rising cost of education.
- Labor cost
Labor cost could also be the causes of rising cost in education. Institutions also face increasing cost as a result of wages since the median household income in Singapore has been growing. Besides labor costs, institutions also spend on utilities, infrastructure, and research equipment. The cost of running education institutions has been growing, which means student have to pay more to finance projects and program. Other factors, like pure price increased, may be contributing to an increase in education costs.
How to save as education costs skyrocket in Singapore
The cost of education in Singapore will continue to grow. Before you begin hyperventilating, you can start planning early for you to have more disposable income in the future to fund the education of your children.
- Early planning
Education is an investment, just like any other. The cost of education can be intimidating if you do not plan early. On your monthly budge, add savings towards education if your net income suffices for that. According to HSBC, almost half the parents in Singapore indicate they wish they had started saving earlier or more regularly for their children’s education. Planning is essential because one can avoid or limit the dependence of study loans for university tuition.
- Take advantage of government subsidies
The government of Singapore offers a few subsidies that can save you the hassle of rising costs of education. For instance, with the Child Development Accounts, the government will give S$3000 to each child account once they are born. And if you contribute to the CDA, the government will offer dollar-for-dollar to match your contribution. CDA is also essential in higher education because they can extend to Post-Secondary Education Account. This can save your child a significant amount in college costs.
- Save on supplementary tuition with online tools
Tuition for supplementary courses can significantly cost of education. Tutors and tuition centers are very expensive, but you can save money by taking advantage of online tools instead of tuition centers. Equally utilizing online tools means you can also cut on the amount the child will spend traveling.
- Get the best education financing loan
With rising education costs, some students will still rely on student loans to finance their education. It is vital to research and obtain the best option in term of rates and fees. Ensure you can service the monthly loan you receive.
Developing an investment plan
Having an education saving strategy is a good way of investing in the future of your child. Conduct research on tuition rates and fees at different schools to determine your saving target. Dedicate some amount of your budget to this plan and consider having an automatic contribution on the same.
You can take advantage of endowment plans which provide insurance coverage and savings. This will ensure you put money towards your child’s education and cover yourself so that in the event something happens to you, they will still get funding.