Dubai: While taking out a student loan to finance one's studies is common practice in other parts of the world, students and parents in the UAE tend not to follow suit.
This happens for a range of reasons: few banks in the UAE offer student loans, students take student loans from their home countries, parents use their savings, students work part time or students have the option of paying fees in instalments.
Also, many universities offer some sort of financial aid to prospective students that range from need-based aid, merit-based scholarships, family grants (if more than one child studies at the institution), discounts for good GPA scores.
"Basically we don't like to take loans," said American University of Sharjah student Yousuf Stapic. He explained that his father, brothers and sisters all contribute toward the payment of his fees and avoided debt.
Because his brothers and sisters also graduated from the university, Stapic was able to benefit from a family discount and gets a discount on fees if he maintains a good GPA. Just over ten per cent of his tuition fees are discounted.
When asked if his university friends took loans the Bosnian national said: "Honestly I've not heard of anybody taking loans. AUS is not a cheap university but you do get financial aid depending on the family discount, grades and other things."
Pakistani national Suman Shafi at Middlesex University Dubai is also supported by her father. "I'm not spending my own money at university — he's paying from his savings," she said and added that her parents made early provisions for college.
"I have a few friends who came to Dubai for their studies — they are working and studying and pay for their own fees."
University of Wollongong in Dubai registrar Sandra Lees said most students were funded by their parents.
"We have a deal with Abu Dhabi Commercial Bank [ADCB] to provide student loans, but very few students have accessed them. Students here in the UAE do try to fund their own studies," she said.
ADCB has links with a number of UAE-based universities and offers loans up to Dh250,000. Barclays also offers an education loan and is linked to Murdoch University Dubai, Cass Business School, London Business School, Middlesex University Dubai. These banks are among a minority of banks that offer student loans.
Lee said international students, from India for example, coming to study at UOWD would take out loans in their home countries. Countries like Canada and Norway would offer student loans through the government.
UOWD also offers financial aid and it's a new initiative that commenced with the August intake last year. And there are scholarships for academic excellence, scholarships for children of alumni, corporate discounts and the option to pay fees in instalments.
Some parents who are determined to send their children to popular university destinations in the US, UK, Canada or Australia have incurred large debts. Dubai resident Leena Dias [not her real name] financed her son's and daughter's university studies in the US and Canada respectively.
She and her husband have completely depleted their life savings to pay for their studies.
"It's difficult for international students to get a co-signer in the US or Canada and parents are struggling to find sources of finance." Dias said her son's fees were $35,000 per year.
Dias and her husband were not approved for a loan and had to ask a relative to take out a loan on their behalf. This only paid for one semester of their son's study. They had to use their savings and their son managed to get a student loan with a US co-signer eventually.
"My son graduated in May and he has $100,000 of student debt. Luckily he is very enterprising and got a good job with a tech firm in Boston and is paying off his loan. But many of his friends cannot find jobs in the US."
Dias is still struggling with her daughter's fees and is concerned about the lack of savings for retirement.
"We wanted to give our children the very best as all parents do."