I am worried about the long term cost of my children’s Education, specifically 3rd level. What does the future hold and what can I do now to plan for these costs?
Every parent or guardian wants to give their child the best education possible. This is especially important in today’s competitive environment where educational achievement can at least open doors for you that may allow you to secure employment, doors that otherwise may remain closed.
Most parents would like their children to have at least the opportunity of attending some form of 3rd Level education be it University, Institutes of Technology or Vocational Courses.
The key items to consider around education and the costs of education are:
The jobs of the future will be based around the often quoted spoken mantra of our ‘knowledge economy’. The Irish economy cannot compete with the lower cost economies of the Far-East andLatin America, so our economy will increasingly depend on and offer opportunities to those with suitable skills to match this new frontier.
We can even see this effect happening now with many of those skills that were required in our economy over the past decade now very unfortunately no longer required. Huge numbers of people are undergoing substantial and constructive re-training and up skilling to enable them to match their skills with the economy of the future
With regards to Government policy in relation to how to fund our future educational needs, there has been much political discourse on what this funding model for 3rd Level will look like in years to come. However, before we look at the potential future costs let us consider the current costs. The cost of maintaining a child in University or College if they are living away from home is estimated at €925 per month*, although I imagine many parents reading this could provide ample evidence it is in fact a lot more. The simple question is - could you afford to hand out almost €1,000 per month per child for 4-5 years without some concrete level of savings in place?
When you factor into account the considerable likelihood that the current funding model, which is very much dependent on central Government funding, is likely to change in some form, it is a reasonable assumption to make that the responsibility of funding your child’s 3rd level education, and the fees that come with this responsibility, will increasingly fall on you.
Given the increase in the school and University going population in the coming years and the depleted Government resources to facilitate this level of spending, it is unfortunately going to be hard to avoid the reality of increased educational costs for parents and guardians.
Much speculation has been given over to what the future educational funding model will look like. What is not part of the speculation is the increased cost of this model aligned to the reduced ability of Government to fund it. Huge growth in demand, projected at over 70%*, for 3rd Level places is expected over the next two decades.
So, what can you do?
Given the projected costs of educational funding and the skills needed to secure employment in the future it is a wise measure to start funding for your child’s education well in advance. The sooner you start this process the easier it is.
There is an unending list of savings products on the market, right from the typical post office savings account up to more complex investment fund models which allow you to invest in a wide basket of assets such as cash, equities, property, bonds and much more. What you decide to invest in is a conversation for another day but we do recommend you put some form of a plan in place to give your children the best educational leg up possible
Our simple advice is to you is to spread the educational cost over the 10-15 years you are saving, instead of the 4-5 years you are spending it!
*Source: Higher Education Authority, 2008
*Minister for Education & Skills – Speech given at the RoyalIrishAcademy31st May 2011