Majority of parents here are willing to empty out their savings and go into debt to finance their children’s education even as concerns grow over cost, according to a HSBC Bank survey.
Foundations for the Future said in its latest Value of Education report series for HSBC that 57 per cent of the 411 Malaysian parents surveyed said they were willing to take up loans to fund their child’s university or college education despite having saved up earlier.
“Parents are willing to make big sacrifices for the sake of their children’s education.
“They invest time, energy and money — and some even risk their own financial security — to give the next generation a good life,” the bank said in a statement.
The report was unveiled to the media today.
The survey on 411 Malaysian parents also saw most of them willing to sacrifice their retirement savings or health insurance payments to ensure their kids get a good education.
Eighty per cent of those surveyed said they have planned or will plan earlier and save up the purpose.
“The reason parents value education is entirely understandable. Education opens doors.
“It equips young people with the skills they need to navigate the world and live an independent, fulfilled life and help them find a rewarding job,” the report said.
This explains why most parents are picky about the career choices of their children, with majority admitting that they would tell their kids to take up courses that would give them jobs with the highest pay.
In this category, 22 per cent of parents surveyed believed medicine was the best option, followed by engineering at 16 per cent and the civil service at 10 per cent.
Private education has become more expensive in recent years, with reports suggesting a cost increase of up to 25 per cent.
HSBC Bank previously estimated that the total annual cost of an undergraduate degree, including living expenses, at around US$13,000 (RM52,800).
Today the bank said Malaysian parents spent an average of US$8,720 (RM35,000) a year on their children’s education. Those who send their kids overseas would spend an average RM200,000 per child.
This explains why cost was top of parents’ minds when it comes to their children’s future, with 61 per cent of respondents saying they were worried about how it could affect their financial well being.
Lim Eng Seong, HSBC Malaysia’s country head of retail banking and wealth management, said parents must have proper financial planning to avoid a situation where they sacrifice their well being for that of their children.
“By having a financial plan to meet their family’s overall needs, parents will be better placed to support their children’s studies without compromising on their own long-term financial goals,” he said.
Source –Malay Mail Online-