In Focus

Plans to fund education

Study the options to secure the future of school and university goers

  • By Adrienne Harebottle, Feature Writer
  • Published: 00:00 September 7, 2010
  • In Focus

Banks understand the importance of quality education and the financial pressure that paying for it can put on parents, so they are increasingly offering products to help cope with the costs.

Tie ups between financial institutions and schools and universities, which offer scholars and their parents assistance through exclusive payment schemes, are also becoming more common.

Barclays offers a range of products. "We have customised savings plans designed to enable a regular income to pay for a child's anticipated education expenses," says Mark Elliott, Head of Branch Distribution, Consumer Banking at Barclays.

Financial advisors are available to help parents make educated decisions, says Elliott. "We have a dedicated team of specialists that help parents in understanding their risk appetite and the time horizon for investing in these plans, and arrive at the expected education expenses, taking inflation into account."

Abu Dhabi Commercial Bank's (ADCB) advisors can help parents every step of the way in preparing funding for their children's tuition. "Our savings plans are long-term systematic investment plans in which the customer makes regular savings over a minimum period of five years and up to 30 years in order to meet a certain future goal," says Rahul Unny, Vice-President, Unsecured Loans, ADCB.

"We have a team of financial advisors who can assist parents on the best suited products for them. Apart from that, ADCB guides the parents to a host of partner educational consultants for complete advice on various fields of education and institutes available."

Emirates NBD also offers a savings programme for education. Having realised the anticipated tuition costs parents are then able to start saving for this amount through the Income Builder Plan for Education. Under this programme, parents are guaranteed that the expenses they have planned for will be paid.

Battling the present

The support of banks and financial advisors helps parents to plan for the future, but many parents are battling in the present. According to the Dubai Statistics Centre, inflation rose 4 per cent last year, but tuition costs increased more than four times this rate to climb 18 per cent. Some relief was had with the announcement by the Knowledge and Human Development Authority earlier this year that a freeze on tuition fees for the coming year had been implemented. However, many parents say they will still be struggling during the next academic year.

One year's education for a grade 12 pupil at a private school in Dubai can cost as much as Dh92,000. While school fees are calculated on a sliding scale and are more expensive for high school levels, nursery and primary education is also expensive, says Jane from America. "I'm paying over Dh46,000 for my five-year-old," says the mother-of-three. "I have no choice but to take a loan; I just can't keep up."

Many people associate education loans with university costs, but there are several options available to parents with children in any level of schooling.

Abu Dhabi Islamic Bank's (ADIB) Education Finance gives parents access to up to Dh250,000, and does not require instalments to be paid for the first three months. For tertiary education the loan can be paid off over a 60-month period, while an 18-month repayment period is for a school loan. Additional benefits of Education Finance include an option to postpone one payment by a month and that it covers all education expenses including books, transportation, library fees and more.

No matter what age your child, there is a savings or loan scheme to help you pay one of your most important bills. After all; who can put a price on the value of a good education?

TIE UPS

Financing facilities and services available in the UAE

Helping parents with children at Taaleem schools deal with hefty upfront payments is Barclays' School Fee Finance, a facility that allows parents to pay for their child's annual school fees on a monthly basis. By paying a nominal fee as a financing charge parents are then assured that the annual tuition fee will be paid when it is due.

Schools under Taaleem management are Al-Mizhar American Academy for Girls; Dubai British School; The Children's Garden (Green Community and Jumeira); Greenfield Community School; My Nursery; Raha International School; Uptown School; Uptown High; and Jumeira Baccalaureate School.

Also in a tie up with Barclays are London Business School Dubai and Cass Business School Dubai. Under this partnership Executive MBA (EMBA) students can take a loan of up to Dh250,000. Students are able to pay just the interest every month for the first two years of the loan, and only have to start paying the full instalments after graduation.

ADCB has tied up with various academic institutions to offer their students loans of up to Dh250,000. "Every academic institution is assigned a relationship manager who can guide the students or parents through end-to-end process," says Rahul Unny, Vice-President, Unsecured Loans, ADCB.

Loan repayments for the ADCB Ambition Loan for Education are flexible and can cover a period from six to 60 months. Institutions in the ADCB partnership are: INSEAD Global Executive MBA; University of Wollongong in Dubai; British University of Dubai; Manchester Business School; Intelligent Partners; Institute of Management Technology; American University of Ras Al Khaimah; and International Centre of Excellence.

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