Education planning for expats
Education for an expat family presents a true world of opportunity that doesn't have to be financially testing
Being based overseas gives children a head start in embracing an international lifestyle, and as far as their education is concerned, the opportunities are vast.
Some expats may choose to send their children to schools in the community where they are living or to a local international school. Others may decide the best option is to send children to a boarding school in their home country. Another possibility is home schooling.
For older children, relocating abroad could make it easier to attend leading international universities.
No matter where you move to or the type and stage of education needed for your children, planning ahead is vital. Not just to ensure the best possible education for your children, but to also effectively manage any financial aspect and future costs.
"No matter where you move to or the type and stage of education needed for your children, planning ahead is vital."
Schooling costs can vary enormously and, depending on where you're located, international school fees may be higher than those at home-based boarding schools. Conversely, travel costs will need to be considered for children studying away from home, as well as for visits from parents.
A low cost of living in a country is no guarantee that local school fees will follow suit, so it is always worth checking your intended destination to avoid being caught out by high tuition costs. For example, international school fees in the Middle East and China can be among the highest globally, even though general living costs are often lower than in some other countries.
A state-funded local school is usually the most affordable option; although, you will often have to pay to access the education system or, as will be the case in some countries, there will be little choice but to go private.
There may be stiff competition for places in some schools, particularly for younger children. Limited places may be quickly filled for the younger years, as many families make the move abroad before their children start school. This is often done to avoid the disruption that can be caused by changing schools when children are older.
Even in countries where local schooling is comparatively cheap, costs can rise sharply when children reach further and higher education. However, if they decide to study at a university in their home country, they could qualify for lower fees. Home students - citizens or those with residency status - are often not subject to higher international fees.
Taking advantage of opportunities to study at leading universities around the world can also have varying financial implications. Tuition fee levels for 'non-home' students can vary significantly between countries, so at times moving abroad to study could work out as a more affordable option. However, extra travelling and living costs will need to be considered.
Doing your homework when investing in your children's education helps you manage the financial impact of their school and university life. At the same time, it could help your child reap substantial returns on that investment in years to come. See the HSBC Value of Education report for the latest trends in attitudes to education.
Sending your children to a local school, where lessons are taught in the native language, can be an isolating or frustrating experience at first. In the long run, however, it could have considerable benefits. It can help them learn the language quickly, which could be of great benefit to them as they approach adulthood. It can also mean having a greater choice of where to study at university level and open up additional job opportunities.
At school age, possibly the most crucial consideration is the academic qualifications that children will be working towards. Whether qualifications are transferable and recognised overseas will be important in terms of access to universities around the globe and their future career.
International schools can score highly here, often offering the International Baccalaureate alongside or instead of a national or local curriculum. Pupils have the opportunity to learn the native language while being immersed in the culture, alongside peers from many countries.
International schools can offer children opportunities to try activities, not usually available in other schools. They could immerse themselves in a range of after-school activities; from capoeira (martial art and ritual combat dance) or surfing in Rio to learning Chinese calligraphy in Shanghai. Check which extras are included in the fees, and what you will need to pay extra for.
Advanced planning will help you manage the financing of future education fees and prepare you for unexpected expenses. For example, even if fees are currently paid as part of your relocation package, this might not be the case in your next posting. There are also considerations, such as travel costs for each term which will need to be factored in if children are being educated at boarding school or studying at university away from the family home.
When regular school fees are payable in a different currency, a flexible forward transaction - which lets you fix the exchange rate for one or more transfers for a certain amount of time - could be a useful solution to help mitigate the impact of currency fluctuations.
Additionally, children who are talented at sport or music may qualify for a scholarship - usually with a discount on fees - so it can be worth enquiring about eligibility.
Expat children usually have access to unique educational opportunities that can pay dividends later on. Although the costs might be higher than at home, by planning ahead, over time you can save for these additional costs and minimise the impact on your day to day living.
The value of investments (and any income from them) can fall as well as rise and you may not get back what you invested. For some investments this can also happen as a result of exchange rate fluctuations as shares and funds may have exposure to overseas markets. Investing should be seen as a medium to long-term proposition of at least five years.
HSBC Value of Education report - hsbc.com (2015)
Sending your child to a private boarding school overseas - telegraph.co.uk (July 2015)
More international schools and pupils in the UAE - thenational.ae (August 2014)
The Booming International Schools Sector - wenr.wes.org (July 2014)