With inland schools having returned to classes last week and coastal schools re-opening tomorrow, many parents are already feeling the pressure of education costs.
These costs are bound to rise and tertiary education will be beyond most parents’ means, especially if they haven’t planned financially.
Pupils are in grade one this year, and who will be enrolling for their first year at a public university in 12 years time, can expect to pay about R160 000 when they enter university.
The National Student Financial Aid Scheme (NSFAS) estimates that for the 2011 academic year, it will cost R50 277 to study at a South African public university for a three-year degree. This amount includes tuition and residence fees as well as the cost of books and day-to-day expenses such as food.
The average annual increase for these expenses over the past four years has been 9,4%, so graduates from the grade one class of 2011 will require about R160 000 to enroll for their first year at a public university for a three-year degree.
Julian Alben, general manager at Absa Insurance and Financial Advisers, says saving for your children’s education should start as early as possible. “It must form part of every family’s budget,” he says. Using investment vehicles, this can be achieved — which includes traditional education plans offered by insurance companies, as well as unit trusts.
With unit trusts, for example, if you invest R200 per month for a child starting grade one this year, the amount would have matured to an estimated R55 287 in 2024, assuming an annual return of 10%.
“Obviously, the greater your monthly contribution, the higher your maturity value would be,” says Alben.
Unit trust companies such as Absa Investments have teamed up with the government to establish the Fundisa Fund. The fund affords parents an opportunity to save towards their children’s tertiary education. Each time you save via Fundisa, you receive a bonus at the end of the year, which could be anything up to 25% of the amount you have saved during that year. This is added to your savings annually.
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