Many Bermudian students dream of obtaining a college or university education overseas.
For that to become a reality requires far more than academic ambition alone – you also need deep pockets for education fees, housing, food, transportation, health insurance and daily living expenses.
Studies have put the price of an overseas four-year degree anywhere between $20,000 and $100,000, so planning for them realistically is a critical part of making your dream come true.
Family planning
“One of the best gifts you can give your child is a keen understanding of money and budgeting,” said retired international financial planner and author, Martha Myron.
Not a finance geek? Not to worry, you can easily teach young adults about making wise financial decisions just by helping them to differentiate between wants and needs.
As one former CedarBridge Academy students told us: “My parents always gave me money to spend when we went on a trip, but it was supposed to cover my meals as well as any shopping that I wanted to do.
“On the first day, a trip to New York, I rushed out and purchased a pair of designer sneakers but spent so much that I didn’t have any money left for lunch on the last day of the trip.
“Having to sit in the restaurant and watch my family eat was a budgeting lesson I have never forgotten.”
When to start saving
If you start a college fund when a child is born and contribute to it consistently, you will accumulate a significant nest egg by the time that child is applying to universities.
You might be surprised to know that thanks to the miracles of compounding, a regular contribution as small as $50 per month invested at 4 per cent could grow to $15,779 by the time a child is 18.
“You can start a college fund any time that you have a little extra and add to it over time,” Ms Myron said.
“I recommend that you lock it into a certificate of deposit or a US bond. These are both very safe investments that earn interest and, because you have to go through a process to cash them in, you will be less tempted to spend the money until you really need it.”
Your bank can explain these and other options in greater detail.
Realistic planning
Regardless of whether you can contribute financially to a student’s education, there are many things that any parent or guardian can do to help.
In many cases, the difference between a future-building educational experience and years of financial strain comes down to how thoroughly and strategically you pursue scholarship opportunities.
For many students, scholarships are not simply a welcome bonus: they are an essential part of a financial strategy that makes overseas education possible. Apply early, cast a wide net and approach the process with care and organisation to improve your chances of success.
Many great scholarships are available in Bermuda, and sometimes money goes unallocated simply because no one who met the criteria applied.
Parents can research what scholarships are available and then hold students accountable for completing all the necessary steps throughout the application process in a timely manner.
While a university degree is often associated with higher earning potential, in some instances the cost of obtaining a degree has risen far faster than potential wages in that field after college. It’s wise to consider whether a student’s chosen course of study aligns with their intended career path and is likely to lead to sustainable employment.
Crunching the numbers
It is essential to fully understand the total cost of obtaining a degree at each university your child is considering, so you can focus on applying to places within your family’s budget.
As well as tuition, all students need to be prepared to cover the cost of books, technology and mandatory campus fees like student union fees, orientation fees and health insurance.
Particularly if you are applying to overseas institutions, understand that there can be a significant difference between the cost of tuition listed on the university website, and the total cost of attendance – particularly for foreign students who do not live on campus.
Students who do not live on campus, or reside with an overseas relative, need to budget for: air travel, public transportation, housing – including rent, utilities, damage deposit and furniture – groceries, prescriptions and entertainment.
The most economical option for some Bermudian students could be to enroll at the Bermuda College, where a two-year associate degree tuition total would likely fall in the $8,700 to $11,200 range. The college also offers scholarships, financial aid, online programmes offered by overseas universities that they have partnered with, as well as assistance in transferring credits obtained locally to a variety of overseas institutions.
Closing the funding gap
Early planning, clear-eyed decision-making, and active engagement are required from students and families.
By understanding the true cost of higher education, starting to save as early as possible, applying strategically for scholarships, and choosing institutions and courses of study that align with both career goals and financial realities, Bermudian families can significantly reduce the financial stress often associated with overseas education.
While the numbers may feel daunting, a well-informed and disciplined approach can turn what initially appears to be an insurmountable challenge into a manageable plan that allows students to pursue their educational ambitions without carrying an unnecessary financial burden into adulthood.
