Thursday, 27 September 2012

Pondering How To Pay Your Child's School Fees?

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When Mr. and Mrs. Durosimi found out they were going to have a fourth child they had mixed feelings. After 15 years of marriage, a fourth child? Wale was the least of their problems, not with the rising cost of goods and services. Wale is now an adult and like his older sibling, Temi, is blessed with excellent academic qualities. He is now set for secondary education and has been offered an admission to a ‘top private secondary’ school in Lagos. CLICK BELOW TO READ MORE
The school is rated not only as one of the most popular in the state, but also one of the most expensive. The tuition per term is said to be over N1m and for a year about N3m. In defence, they opined that their teachers are graduates and that the pupils get to travel to foreign lands on excursions. They even have computers in the school and all the classrooms have air conditioners to ensure a conducive learning environment for students.
In the past, the Durosimis won’t even think twice about the fees and enrolling their child, but this is different. Temi is about going abroad for higher education at a time another child is seeking admission to a secondary school. Coincidentally, her tuition and that of Wale’s amount to about N3m each annually, even though one is for a local secondary school and the other a foreign university.  How is that possible, their parents wondered? “We never thought of it this way you know”. “Who would have thought…local fees, higher than international fees!”
In a country where the cost of Montessori schools far outweighs that of tertiary institutions, what does one do? It’s an anomaly that has now become a norm. Parents pay millions on primary and secondary education only for their kids to end up studying obscure courses in private universities that are yet to be accredited. In Nigeria, school fees are a burden to a lot of families who are looking for quality education for their kids. With a virtually non-existent quality public school system, families now have to rely on private schools for the education of their children.
This obvious monopoly of an important industry has ensured quality education is mostly unaffordable. Parents are left with little or no choice as they have a responsibility to ensure their children get the best education possible or risk jeopardising their future. But what if it is unaffordable? How does one avoid missing out on quality education for one’s wards? One way out may be some form of banking/insurance products that can enable parents to put aside some savings monthly until its time for the kids to go to secondary school and/or university. The parents can now borrow/withdraw against their annuity savings made over say 10years. However, that model is uncommon and unproven in Nigeria.
Another way is to resort to borrowing from family, friends and even colleagues at work with a promise to repay at some point. Joining contributory schemes like “esusu” are also logical ways of getting money to fund school fees. Commercial banks also offer soft loans from N50, 000, and above (depending on your income) at interest rates based on “market conditions,” for a revolving tenor of three to six months. Ostensibly, borrowers will have to domicile their salary accounts with the bank, a situation that becomes ominous should the borrower already have a loan with another bank. Applying and providing security such as letter of guarantee from your employer is another impediment that a borrower must grapple with when borrowing in Nigeria. Whichever one you adopt involves a sacrifice that may deny you of your rent or purchase of a car or mortgage or even the education of another child of yours.
As for the Durosimis, theirs is a choice that must be decided very soon. Temi is eager to further her studies and may miss out on her visa application if the fees are not paid soon. Wale needs to meet up with his friends, most of whom have already enrolled with the school, otherwise he may face the ignoble fate of settling for a mediocre but cheaper school. Mr. and Mrs. Durosimi have worked for over 20 years now and plan to retire in 10years. They believe now is the time to accelerate savings for life after work and secure the future of their kids through portfolio investments. But with school fees such as these, their future as a couple is suddenly at odds with that of their kids-by Ugodre Obi-Chukwu

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