14 May 2017
Karin Muller, the executive head of Sanlam Individual Life points out that education costs typically increase at a higher rate than general inflation (CPI). Historically this rate has been between 2% and 4% above general inflation. Generally, a rate 3% above CPI is usually assumed when planning for education costs. As for tertiary education, it currently costs just shy of R30 000 and up to R62 500 per year to study for a BComm degree in one of SA’s top universities. A child who’s starting Grade 1 in 2016 and will start university in 2028 could pay a minimum of R84 400 per year, assuming an increase of 9% per year. This excludes residence fees, meals, books and other administration costs.
Muller says although the high costs associated with seeing children through elementary schools and beyond is not a uniquely South African challenge; affordability is an issue for the majority of parents in this country. A recent Sanlam study done amongst mothers with children aged between 3and 15 years old shows that some parents go as far as holding down two jobs to put their children through private schooling, which they perceive to be the best legacy they can give their children.
“Our study shows that having the best possible education is the biggest dream that most mothers have for their children, regardless of their age or income. At the same time, 1 in 4 mothers are not saving anything towards their children’s education, which means that these dreams may not be realised in future as the costs keep rising.”
Muller says whether you decide to put all that you can afford towards primary and secondary school or to save for the future costs of your children’s post-schooling activity instead, there is no question that you’ll need to spend a considerable amount of money somewhere, given the high cost of education in South Africa.
The survey highlights the following, amongst other things: