Pick quality, not bargains

Overseas-education | Lisa Kao 15 Oct 2019

Getting into university isn't just about cramming to get good grades. It's also about paying lots of money in tuition fees, according to a recent report by the Organisation for Economic Cooperation and Development, which looked at 36 countries, including the United States, Australia, Japan and South Korea.

The report found that students are spending 1.7 times more per student on tertiary level education than non-tertiary level education. It cited as reasons the scale and multi-purpose function of universities as sites of teaching and research.

Many factors influence costs and thus tuition fees. OECD's Education at a Glance 2019 states that some of them include "salaries of the teachers and researchers; development of digital learning and non-teaching services; investments to support internationalization; and amount and type of research activities undertaken by faculty and staff."

Universities often receive government and private funding to fund operations and development. Tuition fees bridge the gap in revenue they received from sources other than students.

In the past decade, several countries have undergone tuition reforms.

The report shows that 15 out of 28 countries with available information has done their reforms respectively between the years 2007/08 and 2017/18.

Most of these countries reformed tuition fees by changing the level of public subsidies, resulting in half of the countries increasing fees for bachelor's degrees in public institutions by over 20 percent over the past decade. This has happened in countries like Canada, Britain, New Zealand and the United States. The only exception is Chile, which saw a decrease in tuition fees - from from US$8,050 (HK$62,790) to US$7,500 on average.

International tuition fees are generally higher than local tuition fees. The report found that popular English speaking countries like Australia, Canada and the United States charged international students more than double compared to local students on average for a bachelor degree at public institutions.

For example, the United States charged an average of US$8,804 for local students and US$24,854 for foreign students annually, while Canada charged US$5,286 for local students and US$20,406 for international students annually.

However, when it comes to private institutions, the difference between international students and local students are not as obvious.

The report found that among 28 countries with available data, only Australia and Latvia had a slight increase in tuition fees for foreign students on bachelor's degree, while countries like the United States, Japan, Italy had no difference in tuition fees between local and international students.

Higher tuition fees may affect the desire of international students to study abroad. However, both the OECD report and Svend Janssen, the head of Asia of Western Union Business Solutions agree that it is not the main factor in their decision.

"It is less a price competition and more a quality competition," said Janssen, whose company Western Union has been managing international payments of more than 700 education institutions in America, Asia, Australia and Europe for 10 years.

Expected employment opportunities in the country of study after graduation often trump concerns about paying more in tuition fees.

Janssen points out that there has been a marked increase in international students over the last ten years, with most of them coming from China.

While China's rapid economic development means that it's easier for Chinese students to pay substantial tuition fees to study abroad, institutions and parents still find it inconvenient to handle international payments. "Different [currency] rates are the first hurdle," said Janssen.

"For example, a Hong Kong institution may expect to find the payment in Hong Kong Dollars, and an Australian student would like to pay in Australian dollars." The student would go to the bank and pay the equivalent, but two corresponding banks take time to process the payment, making the amount the Hong Kong institution receives different to the amount the Australian student has paid.

In these instances, international students may have to pay an extra charge to ensure that the institution receives the exact amount.

It is not only a problem for students - it is also a problem for educational institutions. "The staff has to allocate the payment to the right student and report it in a proper way while ensuring it is paid on time and is the right amount, or they will have to send another reminder to the student."

Janssen said it costs a lot in administration costs and time for the administration staff to reconcile, chase, report payment. "It is said that in general, people are wasting 67 days a year doing this. It is unbelievable as it is more than one-sixth of a year."

To help solve this issue, Western Union GlobalPay for Students runs a portal for both students and institutions to manage payments and is working to provide solutions to problems that occur whilst paying global tuition fees.

No matter the tuition fees or the trouble in global payment, the number of students looking to study abroad shows no signs of slowing down. "It was two million in 2000, but it has gone up to more than five million today," said Janssen.


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