Competition for University places highlights need for careful planning

Wikus Jordaan, Risk Product Manager at Liberty Corporate

The release of the recent 2011 National Senior Certificate (NSC) results by the Department of Basic Education, and the rush by many students to ensure they have a place on their preferred courses, has highlighted the appetite for tertiary education among the newly matriculated, yet for many the rising cost of education can be a huge barrier to entry.

According to Wikus Jordaan, Risk Product Manager at Liberty Corporate, a recent study* found that the average cost of the first year of study for an undergraduate degree across seven South African universities ranged from between R24 845 and R31 759, depending on the nature of the degree. “A university degree is widely recognised as a solid stepping stone on a chosen career path; however, the reality is that this is a huge cost to outlay for one year of study and without financial support from loved ones few would be able to afford to do so.”

He says that with the cost of education continuing to increase, it is becoming increasingly critical for parents to ensure that they plan adequately for their children’s educational future. “Putting enough money away to fund your child’s future education is important; however, it is also vital parents ensure that their children’s tuition fees and other associated costs can be covered should anything happen to them.”

“If a breadwinner becomes permanently disabled or even dies before their child reaches university, the dream of further education may be an impossible one, even with a payout from a standard life insurance policy.”

Jordaan says it is therefore critical for parents to consider the rising cost of children’s education when planning their financial affairs as there are products available that can relieve the anxiety of how to pay for your child’s education in the event of a serious illness or even fatal accident.

He says Liberty Corporate offers a Progressive Educator benefit, which covers an array of education and schooling costs for children of a group scheme or retirement fund member, should they become permanently disabled or die.

“It is important when taking out any such product to ensure that it keeps up with the rising cost of education, so that there is not a large shortfall when covering the cost of tuition fees. It’s also vital for people to understand that these kinds of financial services products are not indemnity products but are designed to provide an affordable level of security to parents, whilst also ensuring that the most critical educational needs of their children are met first, such as tuition fees and any associated costs.”

Jordaan says a 2009 study by the South African Labour and Development Research Unit found that South Africans who have graduated from university are three times more likely to get a job and on average will earn up to four times more than those who did not finish schooling.

“A university education provides children with a real advantage in the workplace and can often mean a far better salary later in life. Most parents want to see their children graduate from university and if they are unable to be there to see them do so, then it is important to ensure that they at least have the financial resources to finish their schooling.”