Parents in South Africa will have to rely on sound financial planning and diligent saving as they face steep annual tuition fee increases in the coming years, new data from Old Mutual shows.
The group’s data shows that if your child starts Grade R in 2020, with education inflation of 9%, you can expect to pay around R1.6 million for their public schooling up to matric and a three-year university qualification.
By comparison, if you choose private schools and university, the costs double to R3.7 million.
“For this year, your monthly costs for school will be around R3,500 for public school and R8,500 for private school, said Marius Pretorius, proposition manager at Old Mutual.
“This may be a significant chunk of your monthly budget and excludes any additional costs like uniforms, stationery, extramural activities, sports or club fees and extra tuition.”
This aligns with recent BusinessTech analysis which found that the average fee hike among the 20 most private expensive schools is around 7%.
When BusinessTech first started tracking the most expensive schools in 2014, only one school (Hilton College) was priced over R200,000 for boarding and tuition – now in 2020, over 30 schools have moved into that price bracket.
Hilton, and nearby MichaelHouse, have since pushed into the R300,000 per year bracket.
As prices continue to climb, parents are starting to feel the pinch – with financial difficulties cited as one of the key reasons children are leaving private schools.
Citing Old Mutual’s recent savings and investment monitor, Pretorius said that around 55% of urban South African parents are not saving for their child’s education.
“A financial advisor can partner with you to recommend and choose a solution that takes your specific needs and circumstances into account, including your budget and time-frame.
“Finding R400 in your monthly budget now to save for your child’s education will ensure that when they reach high school or university, you will be in a much better financial position to cover some of their costs,” he said.