RM150k. That’s how much you need to pay (tuition, books, accommodation, and living costs) for a child tertiary education (3+0 foreign university franchised degree programme) at a private college for 3 years in Malaysia. If you have stashed the money away, great! One less problem (a huge one) to worry. But, what if zero or insufficient savings? Especially, parents, whose children are just a few years away from starting college?
With college expenses increasing year after year, it is best for parents to plan early and invest to finance their child’s tertiary education. Parents can even plan as early as before your baby is born. (For further reading on what to invest, please refer to our article, Saving Money for your Child’s Higher Education.)
Savings for a child’s education is one of the big-ticket expenses parents do worry over. However for various reasons, not everyone can save or does save in advance for education. If you or your parents are among this group, do not give up, let’s discuss what options are available.
A scholarship is monetary help given to support a student’s education. The donor grants the scholarship according to different criteria that normally represent their interests and objectives, usually based on academic achievement. It does not require the recipient to pay back the money.
Your child (the student) needs to submit an application to the donor (government, corporations, and independent foundations). All application will be subject to a selection procedure. And, finally the interview.
There is no such thing as free lunch. Do your research and understand the “catch” that comes with getting a scholarship. Read the terms and conditions carefully.You and your child need to understand these carefully before coming to a decision. For example:
- Most scholarships require a bond. Does your child understand the implications of this?
- Most scholarships require maintenance of a criteria, for example a minimum CGPA, else the scholarship may be withdrawn. Can your child commit to this?
- Some scholarships are tied specifically to a certain academic course or discipline. Does this suit your child’s career choice?
If you chance upon a scholarship that has passed the application submission deadline, go ahead and try your luck. There is still a slim chance of success.
A grant is very similar to a scholarship. The main difference is that grants are often necessary (for example, a student with a poor family background). While a scholarship is generally awarded based on merit (e.g. a high achiever in both academics and school extra-curricular activities).
The donor can also base the award of grants on specific abilities such as athletically-inclined or active involvement in community projects.
A bursary is a financial award to a student based on financial neediness regardless of academic achievements.
You don’t have to pay back.
Note: Scholarship, bursaries, and grants providers may request the student to reimburse a portion or all of the award if the student, for instance, leaves the program without it being completed.
4. Waiver/discount on tuition fees
Colleges grant waivers or deductions on tuition fee to students based on merit. For example, if the student scores good results in academics, sports, or leadership positions. It can be given before or during a program.
The amount waived or deducted can be from 25% to a complete waiver, but this is usually subject to renewal every semester to ensure the receiver maintain a minimum CGPA.
If they do not offer you any of the above four funding options, you can still try to get a financial loan to pay for the tuition fee and living expenses. Usually, the loan requires a guarantor, for example, parents or relatives of a certain minimum financial standing. Exceptions may be given depending on financial capability.
Some loans do offer a conversion from loan to scholarship, provided the student achieves certain criteria, usually based on academic achievement. Thoroughly read the loan’s terms and agreements to find out more.
For Malaysians, we are lucky to have the PTPTN (Perbadanan Tabung Pendidikan Tinggi Nasional or National Higher Education Fund Corporation) loan that’s aimed to support Malaysian students in furthering their education beyond secondary school. Otherwise, government bodies, banks, and commercial corporations or organisations fund the loans.
Remember, a loan is a loan. Teach your child to understand how this works. Just like with any borrower-lender agreement, your child is agreeing to returning the money in certain sums in regular periods spanning a course that is usually in years. Just as the loan has helped your child achieve their academic dreams, it is only proper for your child as an upstanding human being with the right values to pay back their borrowings into the loan fund so that somebody else can also be given assistance to achieve their academic dreams.
6. Other options you can take
If you want to avoid taking a loan or reduce the loan amount, several options are available:
A. College choice
How much salary your child eventually earns is rarely dependent on which college they attended. So, what is it that is really attracting you and your child to attend certain colleges in particular?
- Most believe that attending a top college abroad is the best choice. Discuss this with your child. Why is this “the best”? Is this really the best choice financially?
- Can you financially support your child through local college with an option for twinning abroad? How about completing all locally?
- Can your child qualify for a place in local public university? Can you support your child through local public university until graduation?
B. Academic course choice
Not all academic courses are charged equally.
- Research and understand the different pricing for different courses.
- Discuss with your child about their career choices. Why this career? Can they achieve the same job through a different course?
- A-levels vs. foundation course vs. Form 6 STPM vs matriculation. Can your child qualify? Which makes more sense? Can the college of choice accept all?
- Certificate vs. diploma vs. advance diploma vs. degree. Which route should your child take? Would they want to “pause” their studies or go all the way? Can they qualify for a scholarship?
C. Working part-time
Your child may need to work part-time to cover partially the living expenses. Yes, doing this may affect their studies, but your child will also learn beneficial skills such as time management, learning how to budget, sorting priorities, and without a doubt learn to appreciate the cost of things.
- Discuss with your child the options they have for part-time work. Is the workplace safe? How about transport?
- Take extra effort to check in on your child regularly. It is a struggle to cope with time management, help them sort out priorities and overcome problems.
- Monitor your child for overwhelming stress or loss of focus. Avoid them failing exams or ignoring their health as these will end up being financially more problematic.
- In some colleges, students can apply for part-time jobs on campus, for example as research assistants, dorm leader (RA = resident assistant).
D. Apply for whatever scholarship available
- Treat the search as a part-time job. Research, research and research. Then apply, apply and apply.
- Never say never. Try and try again. Not all scholarships are only for brainiacs or athletic inclined.
D. Ace the exams you’re taking NOW
- Impress upon your child the importance of getting an excellent results no matter what age they are right now. Having better results makes it much easier to qualify for any financial assistance. It’ll also be easier for your high-achieving child to cope with studies although they have a part-time job.
E. Postpone college for a year to earn and save money
- Sometimes there is just no other choice. Discuss this up front with your child when it is still a possibility and before it is reality so that they understand and are not taken by surprise.
- During this time, encourage your child to take up a job while still keeping in touch with academic subjects so they won’t be left behind when they continue their studies.
- Help your child navigate through life. Abandoning their studies can be a tempting option at this point. Impress upon them the importance of keeping their eye on the goal of graduating.
- Talk with your child and allow them to reflect on what they want in career and life. This is their opportunity to grow up faster than other children.
To put a child through college need a lot of money for an average earning household. The best option is to plan early. Time is of the essence when coming to money management. However, there are always alternatives so never lose hope.
What are your experiences with educations funds and alternative education financing? Share with us your experience in the comments below.
He has 25 years working experience in different finance-related jobs. He is now a consultant, and personal finance and business writer. His main goal is to help and educate non-finance professionals to understand and solve their personal finances problems. He believes everyone should be financially literate because everything we do has money implications!
Eric currently resides in Kuala Lumpur, Malaysia with his wife and two young children.
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