Testing times for parents

John will be arriving from the UK this autumn. When he researched schools that teach a British curriculum in Dubai, fees were not a major factor. After all, his company pays a generous education allowance for his children.

But that's not the case for newcomers whose packages do not include such benefits. Schools teaching either a US, UK or international curriculum (a mixture of the two), charge the highest fees in the UAE.

A quick scan of these schools' fees is a real eye-opener. For example, a six-year old at KG2 in Emirates International School will set you back Dh 21,000 ($5,717) while fees for an 11th grader are Dh 38,000 ($10,348), according to the figures published on the school's website. Registration fees, books' deposit, uniforms and transportation are all on top.

Parents who are less specific about the type of curriculum have more affordable options of schools still delivering education in the English language.

For example, Zino, a Briton who arrived in Dubai six months ago, has gone for to a medium-level option. "I've done a bit of research, and chosen a school of average level fees-wise, but [with a] relatively good reputation," he says.

The overall cost for his two children is Dh22,000, including books and tuition. The rest such as uniforms and extra-curricular activities is additional.

"It would be around Dh27,000. But you never meet your budget targets, so a factor of safety is always a must. Let's make it Dh28,000," he says.

The UAE government has recently allowed expatriate children to enrol in the first grade in state schools. But it seems like good news only for Arab expatriates, since the learning language is Arabic. The decision also limits the total number of foreign students to 20 per cent of the school and imposes a fee of Dh6,000 per annum.

Unfortunately, whether school fees are Dh6,000 or Dh30,000, they have to be set against parents' income, a burden especially for expatriates coming from "free-education" societies such as Britain and the US.

But once they find themselves in Dubai, many do not like to compomise in this regard. Already burdened with rent increases, parents may consider stretching their budget further by seeking finance so as to maintain the chosen education for their children.

It's harder still when you remember that payments have to be lump sums, a full year in advance for new enrolments, or three term payments.

Most UAE banks that are active in retail banking activities such as National Bank of Dubai, RAKbank and Mashreqbank, list education finance schemes under their "general personal loan" category, which means applying for a cash loan at whatever interest rate is imposed by each bank.

But the positive side is that many schools have increasingly been accepting monthly or quarterly payments, which may be the reason that banks have not apparently developed special education finance schemes. "[Getting a bank loan] would be the last resort. There is a four-instalment payment scheme with our school, luckily," Zino says.

Getting a personal loan can solve the problem for one schooling year, but it may be advisable to examine to what extent paying off the loan along with its interest is going to impact savings for the following year. If parents plan ahead their savings, they can avoid straining their cash flow when term payments are due.

Emirates Bank seems to take this view as well but its product is only for university students. The bank offers parents the opportunity to begin saving for their children's higher education at lucrative interest rates of between 5 per cent and 8 per cent.

If you start contributing Dh200 per month (with 3 per cent annual escalation) when you are 28 and your child is one year old, the bank says you will have Dh69,315 when he turns eighteen (at 5% interest).

For expatriates who are not planning to remain in the UAE for such a long time, this saving scheme may not be a solution, especially since it requires a salary transfer to the bank. In that case a finance scheme for tuition is available for a listed number of universities.

Parents always seek the best for their children, but it still has to be within their means. Since school education is not a one-time event, a savings scheme may be the answer, even though some may be forced into compromise.

"People do compromise, it's true. Basically, you play a bit on the quality of education you want to give your kids against what you can afford. Or you can 'sacrifice' some of the leisure budget to put into their education," says Zino.