The great school fees conundrum: How are you affording yours?

The great school fees conundrum: How are you affording yours?
18 June 2013

The conversation doing the rounds amongst family and friends at the moment is the ever rising cost of education here in the UAE.

Putting children through private school in the UAE is a major expense. A recent survey by, a guide to schools in the country, found that one in five families spends 30% of their monthly income on their children's education. Unfortunately, I cannot see what the average number of children is per household that participated in the survey, so I have no way of figuring out whether the spend being referred to is for one child or three. But let's say it's for an average of two children.

Ever increasing costs

Couple that with the cost of housing creeping up again, and using up around another 40% of earnings, and you start to see the squeeze. And it seems like this is going to get worse: real-estate companies such ås Jones Lang LaSalle and Cluttons show that annual increases in rents and home prices range from 10 per cent to as much as 88 per cent. Salaries on the other hand, are generally not budging.

Little wonder then that seemingly 'well off' upper management types tell me their financial lives evolve around school fee payments. But if they're feeling the pinch and are acutely aware of this cost, then what hope is there for the majority of expatriates living here?

Perks worth paying for?

But, then again, living in the UAE has its perks; there's the weather, the international melting pot, it's a great launching pad for travel, and offers a cosmopolitan existence that many around the world can only dream of. There's also its tax-free status and opportunities for those willing to go the entrepreneurial route. But can you justify being here if you have three or four children, with no old-style expat package to cover schooling?

Let's go over some issues to work out when thinking through the issue of paying expensive school fees, versus going home to state schools.

Tax: How much would you end up paying in the way of tax if you were to move to your country of origin, or the country where your children plan to go to university. Sure, there is the complaint that the UAE has hidden taxes, and that this takes away from earnings, but if you're in a higher tax bracket, and say paying 35 % or more on your earnings, it's the equivalent of working for someone else for over four months a year. Are your children's education fees more or less than your tax bill?

Family life: if it's decided that your children should be schooled elsewhere, then do you all go? Or does the breadwinner – usually the father – stay behind? How would this affect you, your children, your family?

Lifestyle: Most people have home-help here and you can have experiences that could be more difficult to access back home. The weather is fantastic for most of the year and your children get exposed to a multitude of cultures, form international friendships, and have a broader view of the world we live in.

Cost of living: Cities like Dubai have ranked high amongst the most expensive places to live in the world in the past, and these days it costs more even to live in Abu Dhabi. But, it does depend on what lifestyle you choose for yourself. Many people can get by on a fraction of what they currently spend just downsizing and cutting back.

Work out rough figures for the above then let the facts do the talking. Is it 'worth' it?

University costs too

You also need to think of tertiary education. Some countries will charge higher fees for students who were not resident in that country leading up to their university years. So to get a better feel for the cost of your decision, you should look into what the regulations are wherever your children plan to continue their studies.

Example: if you hold an EU passport and the plan is for your child to read at a British university, then she or he should reside in the UK, or anywhere in the EU, for at least three years for purposes other than education (so boarding school doesn’t count), in order to qualify for home status. On the other hand, British nationals are considered overseas students and pay hefty overseas fees if they reside outside of the EU/ UK in the period leading up to university entrance. There may be ways around this but they vary depending on the conditions laid down by your local authority in the UK.

How much??

The average cost of putting a child through school in the UAE is a quarter of a million dirhams in terms of fees. These range from less than AED10 thousand a year to AED 100 thousand  mark for some schools. Someone I know has four children. She just got notification that the cost for each child will be AED65 thousand per year as of September. That's a whopping AED260 thousand each year for quite a few years, money that could otherwise go into a savings pot, a pension fund or investments.

What are you doing about simply affording this? Having spoken to various financial advisors, the message seems to be good old fashioned SAVE MONEY. Sure there are tools and funds you can subscribe to, but the bottom line is that you need to save now for the decade + of annual school fees, as well as for university education, while forking out your current schooling costs. Is this something you can sustain?

Another friend who has a newborn said to me: they're small in size, big in responsibility. There are some things we can put a monetary value to, and others we cannot. At the end of the day, we must decide what's important to us. Whatever you decide, you need to get saving – school isn't out until you finally see your progeny standing on their own feet, proud and independent.  

This article by Nima Abu-Wardeh first appeared in The National

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