Singapore parents spend $21k a year to send kids to uni

Many even willing to go into debt, putting children's future above retirement needs: HSBC

NUS students working with their laptops at a study area on campus. PHOTO: ST FILE

Singapore parents spend an average of $21,000 a year on their child's university education, more than twice the global average, with over half of them willing to go into debt to pay for it.

Arming their kids with a degree is so important that more than half say they prioritise funding their children's education over paying their bills or saving for retirement.

And while over a quarter of parents here expect the kids to contribute to or pay back some of what is spent on their university education, just 5 per cent actually do.

These are the latest findings of a Value of Education survey series by global bank HSBC. It asked more than 6,200 parents - 395 from Singapore - across 13 countries as well as Hong Kong and Taiwan, about their ambitions and concerns regarding their children's education.

"Singaporeans are placing their children's education at the top of their financial pyramid, often at the expense of other financial commitments and ambitions," said the HSBC report released yesterday.

The survey found that 52 per cent of parents in Singapore are willing to go into debt to fund their child's university or college education.

But Singapore parents are not alone in this regard. The survey also reveals that more parents in other Asian countries and Mexico are willing to make that financial sacrifice.

In China, 81 per cent of parents would go into debt to send their child to university, followed by 74 per cent in Mexico, 71 per cent in India and 67 per cent in Hong Kong.

Parents in Britain (43 per cent), Australia (44 per cent) and France (46 per cent) are the least likely to be willing to go into debt.

According to the survey, 55 per cent of Singapore parents - against a global average of 49 per cent - say that funding their children's education is more important than saving for their own retirement. Also, 38 per cent prioritise it over paying their mortgage or rent, against a global average of 30 per cent.

But Singapore parents' ambitions for their children go beyond higher education. Over three-quarters of parents surveyed in Singapore (77 per cent) have a particular career path in mind for their child, with medicine (14 per cent), finance (10 per cent) and engineering (8 per cent) being the preferred vocations.

Said Mr Matthew Colebrook, who heads retail banking and wealth management at HSBC Bank (Singapore): "What is striking from our report is how much Singaporeans see education as an enabler for their children's future professional success, and that they will prioritise it above all other family expenses and also their own retirement savings."

Almost all Singapore students heading for university are relying on the bank of mum and dad - 95 per cent of parents surveyed say they foot some of the cost.

But while more than a quarter (27 per cent) of parents surveyed in Singapore expect that the children will shoulder some of the cost of their own university education, only 5 per cent of the children actually do.

One parent, Madam Shirley Ang, said she would consider paying for her children's education as they represent the family's future.

"If they don't get a good education, it might affect their future careers," said Madam Ang, 47, who has three children.

"I would expect them to pay back though, to help out with the family expenses, like paying for the utilities, after they've grown up."

•Additional reporting by Tan Fong Han

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A version of this article appeared in the print edition of The Straits Times on June 10, 2016, with the headline Singapore parents spend $21k a year to send kids to uni. Subscribe