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James Lim started out working in the government, before going on to found and run a highly successful IT company for about 10 years. He moved into the finance industry in 2016 and has since become a member of the prestigious Million-Dollar Round Table. He builds his business on the foundation of integrity and trust, which is why most of his clients have placed their investments and financial plans with him.

Will you have enough to send your kids to university?

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Apart from healthcare costs, all parents know that the next big thing that need to ensure that they have sufficient savings for is for their kid’s tertiary education costs. However when I speak to many of my clients, while most feel it is important to have sufficient savings to send their kids to the university, many of them do not have a clear idea how much they really need to plan for. This sparked of the idea for this post, which is to try to find an accurate picture of tertiary education costs and a realistic forecast of what it will be like in the future.

Our first source of data comes from NUS, where they have very kindly estimated education costs and living expenses for various countries.

 Arts / Architect / Law (S$)Engineering / Science / Computing (S$)Annual Estimated Accomodation / Living Cost (on-campus, S$) Total Annual Cost (Tuition Fees & Cost of Living, S$)
NUS29,350 – 38,45037,500 – 37,55010,38639,736 – 48,836
UK Universities 33,186 – 41,657 45,848 – 55,068 16,463 49,649 – 71,531
US Universities 56,086 – 66,134 56,086 – 66,134 35,283 91,369 – 101,417
Australia Universities 34,135 – 45,398 37,851 – 43,866 18,987 53,122 – 64,385

Tuition/Living Expenses Comparisons by NUS

Source: http://www.nus.edu.sg/oam/financialaid/financial-tuition-fees.html

For this estimate, living expenses were broken down with the following estimates:

On-Campus accomodation (single/double occupancy)* S$2,625 to S$7,000
Meals S$2,600
Personal expenses S$2,200
Transportation within Singapore S$800
Average cost of books / supplies S$400
Total estimated costs excluding accomodation S$6,000
Total estimated costs including accomodation S$10,000

Local Tertiary Education Living Expenses


Data from TopUniversities indicate that UK tertiary education costs range from £10,000/yr (~S$17,000) and going up to £35,000/yr (~S$61,000) or more for medical degrees. Estimated cost of living in the UK is about £12,000 (~S$21,000) per year, which comes up to a total of about S$38,000 – $80,000 per year, which is relatively similar to what was projected from the NUS website above. Thus for a four year degree program in the UK, one can expect to pay at least S$160,000. Recent report by TheGuardian indicates that British universities have the highest tuition fees in the world.

For the US, costs are estimated to be about US$60,000 (~S$83,000) per year for the top-tier ivy league universities. University of Michigan, a top public university in US estimates annual costs for students to be about US$59,000 per year. Thus a four year degree program in the US will easily cost at least S$300,000.

To round up this section, here is a summary of what you can expect you need to send your child to a 4 year university degree program.

No.CountryTotal Cost (S$)
1Singapore70K - 80K
2USA320K - 400K
3UK160K - 320K

And these figures are for today…

To make things worse, let’s not forget that all these expenses are only valid if your child goes to the university today. It is no secret that education inflation exceeds general inflation, so what kind of increases are we talking about?

School fees for NUS and NTU in a general arts & science degree was about S$6,100 in 2007. It now costs about $8,100 for NUS. That represents a total increase of 33% over the past 10 years, making an average increase of about 3% per year. For the US, data from CollegeBoard indicates that college fees have increased by 50% from 2007 to 2016. That means an average of 5% increase per year. In the UK, tuition fees rose from £3,000 per year in 2006 to £9,000 per year in 2012. While the rise is probably not representative of the future due to the huge subsidies given by the UK government before 2012, we can see that rate of university fees inflation in the UK is probably not going to be lower than that of the US. Thus in general, for purposes of projection, we will use an averal long term education inflation of 3.5% across the world. Please do your own adjustments according to how you see university fees rising in the future.

With a 3.5% long term average education fee inflation, here is the projected total costs for universities from NUS/NTU, US, UK and Australia.

UniversitiesCurrent Total Cost (S$)Total Cost in 5 years (S$)Total Cost in 10 years (S$)Total Cost in 15 years (S$)Total Cost in 20 years (S$)Total Cost in 25 years (S$)

These figures can look very daunting depending which row and column you are looking at. But do note that these are very rough estimates, and some of our assumptions and breakdown have been detailed above. You should adjust the figures according to your personal needs and lifestyle requirements for your kids.

But the bottom line is this, we all need to start accumulating wealth to give us options when the time comes for your kid to go to the university. If you plan for it, even if you do not eventually need the money, it is still your money to enjoy and do with it as you want and definitely can also be used for your retirement. But if you do not plan for it, it just means that when the time comes, you will have less options. So do take a long hard look and if you would like me to work out a viable strategy for you to work towards some of these numbers, do contact me for a non-obligation consultation.



By | 2017-06-14T13:10:21+00:00 June 13th, 2017|Children|0 Comments

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