DUBAI Parents in the UAE are now turning to banks to manage the burden of school fees.
Unlike yesteryear when they took educational loans for their children’s higher studies, the rising cost of schooling at the primary and secondary levels today is forcing many to take the bank route at the earlier stages.
According to James Mullan, co-founder of private education guides www.whichschooladvisor.com and schoolscompared.com, “School fees are one of the key issues for parents. This year the UAE is recording continued inflation. Latest data shows housing and utilities registering an annual inflation rate of 9.95 per cent between July 2014 and July 2015, with education coming in second at 3.93 per cent. Add to this fuel price rise which has not yet impacted CPI data and you can see how education costs will become a contentious area between schools and parents. This will be especially so for larger families, or where employers don’t contribute to educational costs.”
Double whammy
He said parents sending children to British or American schools are hit by a double whammy as these schools are more expensive and rated more highly.
He said: “Annual fees can range from around Dh20,000 to upwards of Dh80,000 per child depending on their age and school. The increase in fees this year would range from 2.92 per cent to 5.84 per cent depending on the school’s annual ratings (see figures below)”.
As these costs add to parents’ expenses, banks are easing their burden with a range of solutions – from arranging personal finance and interest free payment plans to introducing debit cards, credit card cashbacks, even free gifts and pre-paid student cards.
At ADIB, Inas Abou Salem, vice-president and global head of marketing communications and branding, said the bank’s Easy Payment Plan offers a 100 per cent Murabaha profit waiver and entails no processing charges. “The customer can use one of our MasterCard or Visa cards to pay fees and then repay us in six equal instalments at no additional charge.” The bank provides education personal finance at rates starting from 5.49 per cent which can be paid back in up to 48 months. “This is ideal for customers to prepay upfront high education costs, including fees, and not be worried for four years,” said Salem. This summer, the bank also introduced the first-of-its-kind ADIB-ISIC prepaid card for students, giving them control over spending and making them eligible for hefty discounts in 130 countries, including the UAE. Funds can be loaded through ADIB’s free mobile app, ATMs, online transfers and branches. ADIB offers other facilities like the Darhoom card, Banoon children’s savings account and youth savings accounts and Takaful programmes.
Guaranteed gift
Other banks too have solutions.
Nimish Dwivedi, Mashreq’s head of payments, said: “Mashreq’s cardholders can pay fees at any school locally and internationally and convert their transaction to an interest free easy payment plan for up to 12 months by calling the bank. Mashreq offers Easy Cheque through credit cards even if the school does not accept cards. All cardholders need to do is place a request for a cheque favouring the local school and Mashreq delivers the cheque to their doorstep. The amount is charged to the customer’s Mashreq credit card and repayments can be made in equal instalments for up to 12 months.”
Dwivedi said an all-new offer by Mashreq with Souq.com guarantees a gift to cardholders - a Samsung tablet with a fee payment of Dh6,000, iPad mini if the amount is Dh12,000, Lenovo notebook if it exceeds Dh20,000 or a Lenovo laptop if it is over Dh30,000.
Similarly, Emirates NBD for the first time has extended its ‘Back to School’ campaign to include debit cards. R. Sivaram, head of retail assets and cards business, said: “Emirates NBD debit and credit cardholders can pay school fees with three convenient options. They can enjoy 10 per cent cash back on all school fee spends above Dh2,500 by sending an SMS to enroll. They also have the option of converting their fee payments to 0 per cent instalment plans of three, six or 12 months, or opt for the Dial-a-Cheque facility for up to 75 per cent of the available credit limit if the school does not accept credit cards.”
At RAKBANK, Abdul Karim Juma, head of Islamic Banking, said its AMAL Service Finance helps parents with fee payments. “It is a convenient substitute to paying tuition fees in one lump sum and allows parents to keep their savings or use them for other purposes. It is easy to apply for and approvals are made within two-three working days. Customers do not need to maintain a minimum balance in their account and a salary transfer is not necessary. All that is required is to fill out a form and to provide receipts and invoices from the school plus three-month bank statements. AMAL Service Finance offers competitive profit rates with a flexible repayment period of up to 12 months.”
YOUSPEAK: How are you coping with your child’s rising school fees?