Education has been acknowledged as one of the most essential weapons used by man to control his environment and shape his destiny. As Parents, a very sound education is the main heritage we can give to our children. Whilst this gives us the confidence we need for the future, it reduces the dependence of the child on relatives in particular and the society in general. However, the amount required for successfully completing a child’s education is undoubtedly a question every parent dreads.
For a child entering into the university in 2010, the full cost of four years at a private university could amount to nearly N5,000,000. Next to buying a home, a university education is the largest expenditure most parents will ever undertake. The key to sending your child to college is advance planning.
Can I afford to send my child to college?
Although the answer hopefully is yes, you will have to plan ahead. Unless you are very well off financially, you cannot expect to sit on the sidelines for years and then suddenly find the funds to pay for higher education when your child is ready. The best thing to do is to start saving as early as possible, even if you are able to save only a small amount at first.
How much will college cost in the future?
Our findings indicate that for the 2009/2010 academic session, the average annual cost of a four-year public university is put around N200,000 while the average annual cost of a four-year private college is around N1,000,000. The total figures include five expense items: tuition and fees, boarding fees, books and supplies, transportation and reasonable personal expenses.
Whilst we believe that education costs will continue to rise, the question we are unable to answer is by how much? During the last few years, university costs have increased at an average rate of about 10 to 15 percent per annum even as institutions tried to control escalating costs. But going forward for the next 10 years, university cost is expected to increase a bit more to about an average of 20 or 25 percent per annum.
How will I pay for it?
More than 90% of parents save less than 10 percent of their children’s education costs before university, usually believing that they will have enough when the time comes to pay the bills. As children make progress, parents can supplement this down payment by:
Obtaining financial aid-related loans
Tapping into their own investments (e.g. mutual funds, stocks)
Having their children apply for financial aid (e.g., student loans, grants, scholarships)
Having their children contribute a portion of his or her savings and/or investments
Having their children obtain a part-time job during college
However, we believe that setting money aside in a sinking fund to cater for your children’s education would be advantageous to an individual because the funds would be accessible for your use easily.
