Tshepo just about fell off his chair.
It felt like the other day his son started school and now he was staring nervously at the admissions page of a local university’s website.
“Man, I remember walking him into the school building for the first time. The short pants with his skinny legs sticking out, his lunchbox with Black Cat peanut butter sandwiches tucked neatly under his arm and his shiny new shoes reflecting back a beaming toothy smile.”
To be honest, back then Tshepo was just happy to get his son into a good school close to home. He felt he could relax until high school rolled around and then start making plans to save for university fees. The problem is that the high school years did roll around and passed by in the blink of an eye.
What does the first year at university cost right now?
Since Tshepo lives in Joburg, let us consider two options when it comes to university:
- The University of the Witwatersrand, and
- The University of Johannesburg
Over and above choosing a university, he also has to look at various study options. From their website it seems as if these are:
- Commerce and law
- Health Sciences, and
What do first-year studies cost?
- Humanities – anywhere between R31 600 and R50 240
- Commerce and law – between R44 010 and R48 530
- Engineering – from R53 630 to R67 740
- Health sciences – from R43 040 to R67 950
- Science – +/- R50 000
Whichever way he looked at it, Tshepo was in for anywhere between R50 000 and R60 000. And that’s for year one only.
What will it cost when your child matriculates?
So, we know how much it costs to send your child to university nowadays. What we don’t know is how much it will cost twelve years from now when your child matriculates. But we can estimate.
There’s an interesting article on Stats SA relating to tuition fee trends over time.
According to this article, from 2008 to 2015, the average annual increase was 8, 8%. But interestingly, just above that statement is a graph showing the statistics year on year. This is what that graph shows:
- 2015 – 9, 8%
- 2014 – 9, 4%
- 2013 – 9, 8%
- 2012 – 9, 8%
It seems as if 10% per annum is a reasonable figure to use if you want to work out how much it’s going to cost to in the future.
Let’s do the calculation for your child starting with grade one
So, what do we know?
Well, the first thing we know is that your child will spend the next 12 years in school. This means that your child will start university 13 years from now. We also know that the university costs shown above were for the year which has past.
Let’s now project what the cost of the first year of a University Degree will cost for the next 12 years, while your child is at school:
|Grade 1||2019||1st Year||R55 000|
|Grade 2||2020||1st Year||R60 500|
|Grade 3||2021||1st Year||R66 550|
|Grade 4||2022||1st Year||R73 205|
|Grade 5||2023||1st Year||R80 525|
|Grade 6||2024||1st Year||R88 578|
|Grade 7||2025||1st Year||R97 435|
|Grade 8||2026||1st Year||R107 179|
|Grade 9||2027||1st Year||R117 897|
|Grade 10||2028||1st Year||R129 687|
|Grade 11||2029||1st Year||R142 655|
|Grade 12||2030||1st Year||R156 921|
|First year of University||2031||1st Year||R172 613|
Wow! Can you believe that the R55 000 needed in 2019 for the 1st year of a University Degree will cost R172 613 when your child matriculates in 12 year’s time?
What about the fees for the second and third year at university?
Our suggestion is that you just carry on from where you left off:
|2032||2nd Year fees||R189 874|
|2033||3rd Year fees||R208 861|
Where do you find the money?
Now the problem is coming up with this money by the time you need it. There are three ways to do this:
- One way is to take your chances and hope you can pay when the time comes.
- The second way to do it is to borrow the money. The problem here is that you’ll have to pay interest on the loan.
- A third and far better way is to start investing now and earn interest instead of paying interest.
Why is the third option the best? Well, that’s a topic for another post.
Until next time.
The Wise About Life Team