A university education can help your children develop the necessary skills to be successful in their chosen career path. Unfortunately, a university education is rather expensive, and as parents, you will likely be the one to foot the bill.

While you may be aware that it is going to be costly, what you might not know is just how much university can cost in both the short and the long term.

Here are a few costs to take into consideration while preparing for your child’s future.

What do you need to pay upfront?

These are the big ticket expenses that you will need to come up with the cash before the semester starts.

1. Tuition fees

The first thing that you should think about when it comes to sending your kids off to university. As mentioned previously, University tuition can be very expensive. This is even more apparent if your children want an overseas education.

Fortunately, government subsidised universities such as Universiti of Malaya offer courses at a much lower cost for local students. However, due to many universities often having a limited intake per semester, you may have to consider sending your child to private universities that tend to cost more.

Tuition Fees For Local Students

UniversityAverage Tuition Fees (Per Semester)
University of Malaya (Public)RM8,000 – RM20,000
Universiti Kebangsaan Malaysia (Public)RM8,800 – RM12,650
Universiti Teknologi Malaysia (Public)RM8,100 – RM15,000
Sunway University (Private)RM10,000 – RM35,000
Taylor’s University (Private)RM7,300 – RM40,000
Monash University Malaysia (Private)RM10,000 – RM34,000

This is by no means an exhaustive list. However, it should give you an idea on the average cost of tuition so that you may plan your finances accordingly.

2. Accommodation

Another big cost to consider that will need to be paid out during university is accommodation. Unless you are fortunate enough to live near the university, your child is not going to be able to travel a long distance each day just to attend classes. It is more common for first year university students to choose to stay in the residence halls of their university.

For example, Sunway University has residence halls available that cost around RM2,300 to RM4,900 per 3 months, depending on room size.

Comparatively, University of Malaya charges student residents by day, ranging from RM6.50 to RM10 per day depending on room size.

Many students may also move into private rented rooms after their first year. This is where they rent a room within a house or apartment with friends.

Using Sunway as an example once more, the area surrounding Sunway University hosts a number of rentable properties which can range anywhere from RM1,200 (Subang Ville Aman Condo) per month or more. Depending on the size of the property and the number of students who are willing to split the rent, this could be the cheaper option.

Student residence halls tend to be convenient as they more often than not offer catered service, which means that food is prepared in the cafeteria and can be included in the accommodation fees. These types of residences can be more expensive, but at the very least you will not have to worry about whether your child has enough money for food.

As mentioned previously, if your child chooses a university that is close to home; then you won’t have to worry about this extra costs.

3. Cost of living

If your child is living away from home for their studies, cost of living is another factor to add on. When your child is living with you at home, you are there to look after them. 

However, if they are living away from you, they will need money for their own daily expenses. You will have to determine how much it costs to live in that area and provide them with money to get by. Your child will also have to learn how to budget and save money to get by on limited funds without you around to pay for their additional expenses.

It is a good idea to start teaching your child these skills early on. Even if you already do this, keep reminding them about it so that the lessons stick.

How do you prepare ahead?

Determine if your child wants to head off to university early on. If yes, then then you should start thinking about your finances immediately. While this might be a daunting task, there are plenty of things you can do to help your child and yourself, so long as you start preparing as soon as possible.

The first thing to do is to start saving as early as possible. For many of us, it may not be possible to come up with RM10,000 in a year, let alone RM50,000 or RM100,000 to cover the entire university course fee. In fact, it may take 10 to 15 years to set aside enough savings. Starting early right after your child is born can give the headstart to grow this education fund for your child in time for their university years.

Here are a few ways you can go about saving for your child’s future:

Start an investment fund

Investing is one way to future proof your finances. There are many different types of investments you can look into. One of the safest options is to put your money into a fixed deposit account. While the returns are not spectacular, FD accounts offer virtually no risk. By reinvesting the dividends into the principal amount, you can at least see a decent growth in your savings over time.

You can also try your hand at investing in an equity or balanced equity unit trust fund that offers at least 10% in returns as savings for your children’s higher education. These can be monitored online and adjusted accordingly depending on your risk tolerance. If you are interested, iMoney can help recommend a selection of unit trust and fixed deposit options to help you get started.

Check out PTPTN or other loan options

Another way to approach it is to apply for the Perbadanan Tabung Pendidikan Tinggi Nasional (PTPTN). It is a government institution that was established to provide study loans to Malaysian students for their local tertiary education.

However, keep in mind that you will have to pay back the loan. This also means that you may be putting your child in debt early in his adult life. If you are not sure how to go applying for PTPTN, we have a short guide on how to get started.

There are also education loans offered by various financial institutions but you will be taking on the extra debt burden. If you have more than one child going to university, these debts can become a big strain on your finances.

Take out an education plan

If you are not keen on taking out a loan for your child’s education, several insurance companies offer education policies to finance your children’s higher education. These policies not only offer endowment but also insurance coverage. They provide opportunities for you to invest in various investment-linked funds based on your risk appetite.

University is a huge new step in your child’s life. You should never have to feel worried about something which will help your kids succeed in the future. However, you do need to realistically plan for just how much it is going to cost you. That way your children can have the best start and you won’t be left in a bad financial situation.