$100k for a University Degree?

Yes you read the title correct.

In time to come, our children may have to fork out over a $100,000 just to get a piece of paper that grants them an interview for an entry level job. Well, that is not the problem. The real problem is you, the parent, is going to pay for it!

So how can a university degree cost so much?

Let's see the following breakdown. For illustrative purposes, we shall use a NUS (National University of Singapore) Business degree for a new-born baby girl as example.

Here is the current tuition fees charged by NUS:

According to NUS's tuition fee schedule, a Business degree costs $9,250 per annum.

Education inflation has been historically higher than lifestyle inflation (as measured by the Consumer Price Index, or CPI). Assuming an education inflation rate of 6%, and let's say our new-born baby girl is entering university at age 18, here is how much 1 year of Business studies would cost:

Present Value (PV):    $9,250
Number of Years (n):  18
Inflation Rate (i):         6%
Future Value (FV):     $26,402.64

As you can see, with the effect of inflation, what costs $9,250 today would cost $26,403 in 18 years' time. Is your income increment and investment (or worse, savings) returns able to match a 6% inflation rate? If not, you have no choice but to set aside more money and work harder. Alternatively you have to take some risks and invest in higher yielding instruments.

Assuming our little girl goes through a 4-year course.

Hence the total course fee would be:

$26,402.64 × 4 = $105,610.55

There you go! Over a $100K for a piece of paper, which might not even land you a job in today's competitive world where practically everyone is a degree holder.

If this is a major concern and you need professional help in accumulating for your child's tertiary education, contact me at info@cjhfinance.com for a no-obligation discussion.

(NUS Fees, Source: https://share.nus.edu.sg/registrar/info/ug/UGTuitionCurrent.pdf