The FINANCIAL -- According to new figures released from Higher and higher, HSBC’s latest report in The Value of Education series, globalisation of higher education shows no sign of stalling. The study of over 8,000 parents across 15 countries and territories found that more than two-fifths (42%) would consider sending their child to university abroad, compared to 35% in 2016 – a seven percentage point (pp) increase.
Asian countries are among the most outward looking, with four of the top five countries where parents are considering a university education abroad for their child being India (62%, +15pp), Indonesia (61%, +1pp), China (59%, +15pp), and Hong Kong (52%, -2pp). Even countries among the least likely such as Egypt (+26pp), USA (+14pp), France (+9pp), Canada (+6pp) and Australia (+1pp), see an uplift in the number of parents considering higher education abroad.
This echoes OECD data that highlights that Asian students account for 53% of all students studying abroad worldwide. According to HSBC’s partner, the Institute of International Education (IIE), China is the leading country of origin for international higher education students, sending an estimated 801,000 abroad, with India (182,000) and Malaysia (64,000) also exporting significant numbers.
More generally, student mobility continues to climb with 4.6 million higher education students studying abroad in 2017 compared with 2.1 million in 2001.
Top destinations for university abroad
Parents see the main benefits of a university education abroad as being to help their child gain international work experience (49%), develop foreign language skills (49%) and to be exposed to new experiences, ideas and cultures (48%).
Around two-fifths of parents (39%) have specific universities abroad in mind, attracted mainly by the quality of teaching on offer, their prestige and their ability to open up new job opportunities for their child.
Overall, the USA (47%) is the most favoured destination by parents, ahead of Australia (40%), the UK (39%), Canada (25%) and Germany (23%). While parents who preferred the USA believe it is a good destination for job prospects for graduates (86%), those choosing the UK perceive it as offering high quality universities and colleges (94%) and parents picking Canada think it offers a high quality of life for students (83%).
The IIE estimates that in 2016/2017, the USA attracted around 1,079,000 international higher education students, the UK around 501,000, China 443,000, Australia 328,000 and France 324,000.
Commenting on the USA’s ranking, Rajika Bhandari, Head of Research, Policy and Practice, IIE, said:
“With an intake of over one million, the USA has a strong track record of attracting international students who recognise that a higher education received there is a valuable personal and professional investment. They particularly appreciate the importance of critical thinking as well as the broad range of available resources and the wide variety activities beyond academics offered by America’s more than 4,000 higher education institutions. Additionally, specific programmes are offered to international students so they can gain work experience and ultimately develop their employability skills.”
Cost and value of international education
The majority of parents (73%) considering university abroad for their child expect to make a significant financial contribution, and estimate the overall average cost of an undergraduate and postgraduate degree abroad to be USD157,782 (USD71,580 for undergraduate and USD86,202 for postgraduate)*. Many parents (45%) would go further and consider buying a property in the country where their child is studying.
Parents’ willingness to spend on international education brings huge potential benefits to the host economies. Research from the IIE shows that international higher education students contributed USD39.4 billion to the economy in the USA in 2016, making it the fifth largest service sector export.
Trista Sun, HSBC’s Global Head of International and Cross Border, said:
“HSBC’s report shows that the number of parents, especially in Asia and UAE, who are ready to invest in an overseas university education for their child’s skills and employability continues to grow. With an undergraduate’s total cost expected to be around USD72,000 on average, the investment is financially significant for parents. Additionally, 45% would consider buying a property in their child’s country of study. Parents need to plan ahead and look at all the implications of funding international education.
“With 39% of parents having specific universities abroad in mind for their child, their investment goes beyond financial. They spend a lot of time and energy to help their child build their academic profile and other credentials in order for them to meet the entry requirements at prestigious universities.”
With the power of its global network, HSBC can support customers with their international financial needs in four of the top 5 destinations for higher education abroad. Whether it is setting up a bank account before they arrive in a new country, or welcoming them to settle in, HSBC offers a package of products and solutions to ease their journey abroad. In addition, HSBC is partnering with key players in the education ecosystem – education agencies, secondary schools, language schools, universities, visa services, students’ associations – to provide support to families beyond banking services.
As an example, the International Education Payment Solution (IEPS) was launched recently to enable customers in China to make tuition fees payments directly to schools and universities in Australia, Canada, Hong Kong, the UK and the USA via HSBC Mobile Banking and WeChat.
Practical steps for parents
Consider the benefits of university education abroad: It can help your children to be independent and enhance their job prospects.
Be realistic about the costs: Make sure to plan for all the implications including higher tuition fees, international travel, accommodation, day-to-day expenditure and exchange rate fluctuations.
Start planning early: Early planning and saving for education can help your children fulfil their potential and limit the strain on family finances. Seeking professional advice can help you plan and make better informed choices.
If buying property abroad: Choose a mortgage plan that is most suitable for your needs. Consider the interest rate, repayment period, setting-up fees, early repayment flexibility and cancellation fees. Be aware of the tax and foreign exchange implications.
Practical steps for students
Learn about your new country, its culture and customs before you go.
Sign up to classes or training your university may offer to help you navigate your new surroundings.
Speak to recent graduates who studied aboard, their first-hand experience can help you adapt quicker.
Explore your new country and be open to making new friends.
Get involved in campus activities beyond academics, taking advantage of the many clubs, sports, interest groups and social events to mix with the diverse student population.