The current cost of putting a single child through SA’s private education system from crèche through to the end of their tertiary education is around R2.2m, financial services group Discovery revealed in a recent White paper titled Extending Shared Value to Education.
Drawing on internal data, Discovery indicates that around R5 722 must be saved monthly to fund education for one child from primary school level, while families need to save on average R750 per month from birth simply to fund one child’s tertiary education fees. These figures are based on schooling fees increasing at 10% a year.
“For the average South African, this means that they would need to start saving a few years before their children are even born,” the report reads.
According to the calculations, average tuition fees across public and private primary schools currently sit at around R20 000 and R100 000 respectively, while tuition fees at the most expensive public and private high schools in South Africa can exceed R40 000 and R250 000 a year respectively.
“Given the current pace of education inflation, this means that for a child born today (2017), their final year of schooling will cost around R600 000 alone at the average private high school,” Discovery notes.
Discovery Life Research and Development head Gareth Friedlander told a media round table on 22 November that the R2.2m figure needed to finance a child’s private schooling career is an “astounding” statistic.
The changing demographic profile of first-time mothers makes this finding even more sobering. According to Discovery data, the average age of first time-mothers in SA has increased by 10% over the past 15 years to 26 years old. There are currently more first-time mothers over the age of 35 than under the age of 25.
“While having children at an older age may allow for a couple to build up more savings before the child is born, it also means that they are likely to have a financially dependent child by the time they reach retirement age.
“This could result in many individuals having to work longer into retirement or consume their retirement savings to pay for their children’s tertiary education,” Discovery states.
In addition, education inflation is outpacing salary growth. The group reports that, in South Africa, education inflation has outpaced headline Consumer Price Inflation (CPI) by between 2% and 4% a year.