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The Value of Learning for life

Global Report

Contents

4 Foreword

6 Key findings

8 Making the grade

12 : a recipe for success and happiness

18 Sound foundations for a successful life

22 Funding the future

26 Broadening horizons: higher education abroad

30 Practical steps for planning your child’s education

32 The

34 The Value of Education programme

3 Foreword

University education is the gateway to a successful and happy future. Equipping young people with the core and softer skills they need to enter their careers and achieve their goals, it also benefits the wider society, as highly educated graduates will help improve medical care, foster innovation or run successful businesses.

Decisions made at the earliest stages of a child’s education can ensure they make the most of this opportunity. At HSBC, we help parents plan ahead so they can help their children fulfil their potential.

I am therefore delighted to introduce the second report in The Value of Education series, a global consumer research study commissioned by HSBC. Learning for life explores parents’ hopes and expectations for their children’s education and beyond, with a focus on how parents can help children get what they need to achieve their life goals.

The findings reveal that parents aspire to professional careers for their children, whether in traditional fields like , engineering or , or in newer sectors like business management or computer science.

However, parents are also conscious that, in many ways, their children have it tougher than they did. An increasingly competitive job market means that a standard is seen as necessary but not sufficient. Young people need to do more to stand out from their peers. Postgraduate qualifications and studying abroad are ways to do this, but they can be costly and so require careful advance planning.

Parents also realise that their children need to graduate with life skills as well as academic qualifications to be attractive to employers. They need to leave as confident, responsible and well-rounded adults.

Independence – including financial responsibility – is viewed as the most valuable asset with which a child can leave university. Children can gain an initial grasp of this through contributing to their own university costs, with many parents expecting their children to save up or get a job in order to share the funding.

However, it is parents who take the primary responsibility for funding their children’s university education. While the majority have or expect to have a solid plan in place for doing so, even the best laid plans can go awry. Parents often find that, by the time their children reach university age, they have not saved as much as they intended. The result is that both they and their children are faced with borrowing more and paying off debt for longer than they had planned.

I hope the insights in this report will help parents appreciate the long-term impact of their decisions and put practical measures in place to ensure their children can fulfil their potential.

Charlie Nunn Group Head of Wealth Management, HSBC

4 The Value of Education Learning for life 5 Key findings

64% of parents say that being happy in life is one of the most important 79% goals they have for their child, of parents see an undergraduate compared to only 30% who say degree or higher qualification as career success. essential to their child achieving important goals in their life, and 50% think a postgraduate degree 83% (master’s or higher) is necessary. of parents have a specific occupation in mind for their child, with medicine (19%), engineering (11%) and computer science (8%) the most popular.

58% 39% 66% of parents would most like their of parents have paid for additional of parents have sought advice child to study one of the following tutoring for their child at primary about their child’s university five degree subjects: medicine; stage, 44% at and, of these, 72% business, management and school, and 23% at university. learned of new options they had finance; engineering; computer not considered. and information sciences; or law.

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6 The Value of Education Learning for life Parents who think they will borrow money to fund their child’s university costs expect to be paying it off on average for 42% 6.7 years 77% of parents think that of parents would consider a university education after their child graduates, and sending their child to study at offers poor value expect their child to be paying university abroad and, of for money. off their own university debt for these, 24% would be willing to pay at least half as much again, compared to the cost 7.5 years of educating their child in their home country.

58% 72% 45% of parents think that a university of parents with a pre-primary of parents think that enhanced education is unaffordable for the school child think they will save confidence and social skills are majority of people in their up to cover their future university the most valuable aspects of a country. costs; however, only 53% of university education in preparing those with a child at university for life after graduation. are funding their contribution from savings.

7 Making the grade

Happiness, health children – a higher proportion Parents in Mexico (52%), than being happy (63% and 52% (45%), the UAE (43%) and financial respectively). In contrast, just and (41%) also rate well-being over one in 10 (13%) parents in career success for their children Indonesia and one in five (21%) highly, although they rank it as parents in France and Mexico say the second most important goal, Most parents want a happy life for that leading a healthy lifestyle behind being happy in life. their children – almost two thirds is a top goal for their children, (64%) around the world say that a far lower proportion than say Other parents rank different goals being happy in life is one of the happiness (56%, 86% and 65% more highly. Rather than being three most important goals they respectively). successful in their career, they would like their children to achieve are hoping for their children to as an adult. Financial security rates highly in fulfil their potential, to achieve some parents’ hopes for their the highest possible academic This goal is particularly important children. In France, three in five qualifications, or to make a for parents in developed (60%) parents rank earning difference to society. economies. In France, nearly nine enough money to enjoy a in 10 (86%) parents say that being comfortable life as an important In many developed economies, happy in life is the most important goal, as do over two in five parents prioritise their children goal they have for their children, parents in (43%), fulfilling their potential over a desire shared by around three- , and Taiwan achieving career success. Half of quarters of parents in Canada (all 41%). In contrast, far fewer UK parents (50%) and around two (78%), the UK (77%), Australia parents in (16%), Mexico in five parents in Canada (45%), (77%) and the USA (72%). (20%), the UAE (20%) and India the USA (40%), Australia (40%) (22%) say earning enough to live and (37%) say this is an Physical well-being and financial comfortably is a top three desire important goal, one that is ranked security also figure highly in for their children. higher than pure career success. parents’ aspirations for their children. More than a third (35%) The desire for children to achieve of parents around the world want Seeking success the highest possible academic their children to lead a healthy qualifications is strongest in the lifestyle and a similar proportion In many emerging economies, UAE, where a third (33%) of (34%) want them to earn enough parents hope for their children parents say this is an important to enjoy a comfortable life. to be successful in their career goal for their children, as it is for almost as strongly as they do for parents in Malaysia (29%) and In some places, health beats them to be happy in life. In India, India (28%). happiness. Almost three-quarters career success (51%) is actually (72%) of parents in China and the most popular goal parents Making a difference to society more than half in Turkey (55%) have for their children, out-scoring is important to two in five (38%) rate leading a healthy lifestyle a happy life (49%). parents in Indonesia and to just as an important goal for their under a quarter (22%) of parents in Turkey and India.

8 The Value of Education Learning for life 64% of parents rank being happy in life as one of their top three goals for their child

The ultimate goal parents have for their children is to be happy in life

64% 35% 34% 30% 29%

Average

Be happy Lead a healthy Earn enough to enjoy Be successful Fulfil their in life lifestyle a comfortable life in their career potential

France 86% 21% 60% 29% 26%

Canada 78% 33% 41% 24% 45%

UK 77% 27% 39% 17% 50%

Australia 77% 34% 41% 17% 40%

USA 72% 33% 38% 21% 40%

Mexico 65% 21% 20% 52% 32%

China 63% 72% 16% 15% 26%

Brazil 62% 30% 35% 32% 13%

Taiwan 61% 57% 41% 17% 29%

Singapore 61% 32% 33% 36% 37%

UAE 60% 29% 20% 43% 15%

Hong Kong 58% 39% 43% 19% 33%

Indonesia 56% 13% 30% 41% 29%

Turkey 52% 55% 32% 26% 13%

Malaysia 52% 26% 35% 45% 14%

India 49% 33% 22% 51% 17%

Q: What are the three most important goals that you want your child to achieve as an adult? A: Ranked 1, 2 or 3. (Base: All parents)

9 83% of parents have a specific occupation in mind for their child

Career ambitions Parents in Asia tend to favour Around three in 10 parents in occupations for their children that the UAE (33%), Indonesia (31%) deliver benefits to society. Almost and Turkey (27%) say they would When it comes to the occupations three in five parents (59%) in most like their children to get a job that parents would most like their Indonesia think this way, as do in medicine. This compares to just children to go into, more than more than two in five in Malaysia over one in 10 (11%) in Australia, four in five (83%) have a specific (49%), China (45%) and Turkey Canada and the UK, where type of job in mind. In emerging (44%). In contrast, just 13% of parents are more concerned with economies, this proportion is parents in France and less than a their children finding a job that even higher, with more than nine quarter in Canada (24%), the USA suits their individual strengths. in 10 parents in Indonesia (97%), (23%) and the UK (23%) share Mexico (95%), China (94%) and this view. A job in engineering is the most Malaysia (92%) having a specific preferable for almost a fifth of occupation in mind for their Parents in developed economies parents in Brazil (18%), Malaysia children. are more likely to take into (18%), the UAE (16%) and Mexico account their child’s individual (16%), compared to just 5% of Parents in developed economies strengths when considering a parents in Australia, Singapore are less focused on this. Fewer desired occupation. Over half of and Taiwan. than two thirds (62%) of parents parents in Australia (55%) and in Australia and fewer than three- more than two in five in the USA Parents in India – a country quarters (72%) in the UK and (45%) and Canada (44%) think renowned for its emerging Canada have a specific job in mind about how well an occupation technology sector – are more than for their children. This is also the suits their child’s personal twice as likely as the average to case for Taiwan (72%). strengths. However, only around a want their children to go into a quarter of parents in Brazil (25%), job in computer science. Nearly Parents’ career preferences for Malaysia (25%) and Taiwan (24%), one in five (18%) see this as the their children are based on several and an even smaller proportion preferred career for their child, factors. More than a third (35%) in Hong Kong (14%), say this is compared to just 8% across the say that income-earning potential a consideration in their career world. is a key consideration. A similar preferences for their child. proportion think that the job’s There is also a distinct gender benefit to society (35%) and how gap when it comes to career well-suited it is to their child’s Doctors, engineers preferences. Parents are more individual strengths (34%) are likely to want their daughters to important. and IT experts go into medicine (22%) than they are for their sons (15%). They are, Income-earning potential exerts Professional, science-based however, more likely to want their a much stronger influence on careers – which traditionally sons to go into engineering (15%, parents’ job preferences for their combine good income-earning compared to 6% for daughters) children in certain countries. Just potential with a high level of job or computer science (10%, under half of parents in India security – take the top spots in compared to 5% for daughters). (49%), Singapore (48%), Malaysia parents’ preferences for their This is true regardless of parents’ (46%) and Indonesia (44%) child. Medicine is the most own gender. say this is a key consideration, favoured occupation, with around compared to around a quarter in a fifth (19%) of parents preferring Turkey (26%), France (25%) and it. Engineering (11% of parents) Mexico (24%). and computer science (8%) are also popular.

10 The Value of Education Learning for life Medicine, engineering and computer science are parents’ top career preferences for their children

Medicine Engineering Computer science

Average 19% 11% 8%

UAE 33% 16% 11%

Indonesia 31% 10% 11%

Turkey 27% 14% 9%

Malaysia 25% 18% 3%

Brazil 23% 18% 6%

Mexico 22% 16% 10%

Hong Kong 19% 6% 4%

China 16% 8% 7%

France 15% 10% 6%

Singapore 15% 5% 6%

India 14% 14% 18%

USA 13% 14% 10%

Taiwan 13% 5% 6%

UK 11% 7% 9%

Canada 11% 11% 5%

Australia 11% 5% 7%

Q: Which, if any, of these specific types of occupation would you most like your child to go into? (Base: All parents)

Forging their nine in 10 in Australia (90%), their children to follow in their Turkey (88%) and Canada (87%). footsteps. own path Parents in certain jobs are For other parents, however, While the majority of parents particularly unlikely to want their following the family tradition is a have a clear idea of the career children to go into the same desirable goal. Almost half (46%) they would most like their children field. Only around one in 10 of parents who work in medicine to go into, more than four in five parents who work in sales and want their child to enter the same (83%) parents around the world marketing (12%), the non-profit profession, as do around three in would prefer their child to enter sector (11%), education (11%) 10 of those practising law (31%), a different occupation from their or a professional trade (9%) – engineering (28%), science (28%) own. This figure rises to around and only 4% who work in retail, and computer science (28%). tourism and catering – would like

11 50% of parents think their child needs a postgraduate qualification to achieve their life goals

Higher education: a recipe for success and happiness

The road to life goals. However, this view Some parents are less convinced is shared by fewer than half of that a is achievement parents in Canada, Australia and a prerequisite for their children the UK (all 48%). to achieve their life goals. Only As access to undergraduate around one in 10 in Australia education improves throughout In an increasingly challenging job and the UK (both 14%), and just the world1, parents have come to market2, many parents believe under a quarter (24%) of Canadian see it as an essential requirement that a postgraduate qualification parents, think that their children for their children to achieve the (master’s degree or higher) is need a postgraduate degree to goals they wish for them. Almost also crucial to help their children achieve their future goals. four in five (79%) parents who stand out. Half (50%) of parents have specific goals for their child around the world think that a In countries where parents are think that an undergraduate postgraduate degree is now a less likely to see university as degree or higher qualification is requirement for their children to a necessity, there is a wider necessary. achieve their goals in life. acceptance of vocational training as a means of children achieving In many countries, the This is particularly evident in their life goals. Over three in 10 necessity of having at least an emerging economies: nearly nine parents in Canada (38%) and the undergraduate degree is almost in 10 (88%) parents in India deem UK (33%), and around one in four universally accepted by parents, a postgraduate qualification a in Australia (26%), France (26%) with more than nine in 10 in necessity, as do four in five (80%) and the USA (25%), think that this China (97%), Mexico (96%), parents in the UAE and around is the highest level of education Indonesia (96%), Turkey (93%), two thirds of parents in Mexico necessary, compared to a tiny Malaysia (92%), the UAE (92%) (69%), Indonesia (67%) and proportion of parents in China and India (91%) seeing it as an Malaysia (65%). (1%), Turkey (1%), Mexico (2%) essential step to achieving and Indonesia (2%).

2 Almost 202 million people were unemployed in 2013 around the world, 1 In OECD countries, the an increase of almost 5 million from 2012 graduation rate has risen from 20% to and on course to increase to more than 39% between 1995 and 2010 (www.uis. 215 million by 2018 (www.ilo.org/wcmsp5/ .org/Education/Documents/oecd- groups/public/---dgreports/---dcomm/---publ/ eag-2012-en.pdf - p 68) documents/publication/wcms_234107.pdf)

12 The Value of Education Learning for life Half of parents think a postgraduate degree is necessary for their Quality, cost and children to achieve their life goals reputation: finding 50% the right balance Average 79% Given the importance parents India 88% place on their children getting 91% a university degree, the choice of is one UAE 80% for careful consideration. The 92% quality of teaching on offer, the reputation of the institution, 69% Mexico the cost of tuition and the cost 96% of living are among the most significant factors feeding into the 67% Indonesia final decision. 96% The quality of teaching is a strong Malaysia 65% consideration for the majority of 92% parents. Almost nine in 10 parents (86%) say this is important when 64% Turkey choosing a university. Nearly 93% three-quarters say the university’s graduate employment rate (73%), 63% Brazil its academic specialism (72%) 89% and its facilities/equipment (72%) are also important. 52% China 97% The prestige and reputation of an institution is also a key factor. 46% France More than two thirds (69%) of 60% parents across the world consider this when deciding which 40% Hong Kong university their children will go to, 85% a figure that rises to over four in 40% five in China (85%), Turkey (83%), Singapore and India (81%). 90%

37% Just under two thirds (65%) of Taiwan parents see tuition costs as an 84% important consideration. This is 31% especially important for parents USA in the USA (81%), as well as 60% for those in Malaysia (77%), 24% Indonesia (77%) and Singapore Canada (76%). The cost of living is 48% deemed important by a similar 14% proportion of parents (62%), UK 48% and particularly so by parents in Malaysia (79%), Indonesia (72%), Turkey and India (both 69%). Australia 14% 48%

Master’s degree or higher Undergraduate degree or higher

Q: What are the three most important goals that you want your child to achieve as an adult? Q: What level of education do you think is necessary for your child to achieve these goals? (Base: Parents who have specific goals for their children to achieve as adults)

13 Subjects matter In countries where there is a Business, management and greater emphasis on career finance is ranked second globally success as a goal, this figure (14%), but is the top preference While the choice of a university is is even higher – around three- in China (25%), Singapore (25%), important, parents also feel that quarters of parents in India (77%), Taiwan (19%) and Hong Kong the subjects they study will have the UAE (73%), Malaysia (72%) (19%). Engineering – ranked third a major impact on their children’s and Indonesia (68%) would like globally (13%) – is parents’ first future success. their children to study one of preference in Malaysia (25%), these five degree subjects. India (23%), Brazil (19%), and the Nearly three in five (58%) parents UK (11%), and is ranked equal first around the world would most Medicine is the most highly with medicine in Canada (11%). like their children to study one of favoured subject globally the following five subject areas (17%), with a particularly strong at university: medicine; business, preference for this degree in management and finance; Indonesia (29%), the UAE (28%) engineering; computer and and Turkey (25%). information sciences; or law.

17% of parents would like their child to study medicine at university

14 The Value of Education Learning for life Career-focused degree subjects are the most popular with parents and finance management Business, Finance and Management Business, science information Computer and Sciences Information Computer and

17%Medicine

Medicine Average 17% 14%14% 9%9%

29% 28% 25% 21% 21% 18% 17% 16% 15% 15% 14% 13% 12% 11% 11% 10% Medicine

25% 25% 22% 18% 19% 19% 16% 15% 13% Business, 10% 9% management 6% 6% 7% 7% and finance 2%

25% 23% 20% 20% 19% 16% 12% 10% 10% 11% 11% 8% 6% 7% Engineering 3% 4%

16% Computer and 14% 11% information 9% 10% 10% 10% 10% 9% 7% 8% science 6% 6% 5% 6% 6%

14% 11% 12% 7% 6% 5% 5% 5% Law 3% 0% 2% 3% 2% 4% 3% 4%

UK UAE Brazil China India USA Turkey Mexico France Taiwan Canada Malaysia Australia Indonesia Singapore Hong Kong

Q: Which, if any, of the following subject areas would you most like your child to study at university? (Base: All parents)

15 Asking for advice different benefits. Advice from Among parents whose child is personal contacts is the most age or older, nearly effective at relieving parents’ two in five (39%) have paid for Almost two thirds (66%) of worries about their children’s additional tutoring at the primary parents have sought advice university education. Over a third level. A larger proportion (44%) about their children’s university (37%) of parents who sought of those with a child currently at education. Parents in Asia are advice from family say it relieved or university the most likely to have done their worries, as do a similar have paid for tutors at the so – more than eight in 10 in proportion who consulted friends secondary level. Nearly a quarter China (88%), Indonesia (87%), (35%), teachers (33%) and other (23%) of those with a child at India (85%) and Malaysia (82%). parents (31%). university have paid for tutoring In contrast, only around half to supplement their university this proportion in the UK and Financial advisers are the education. Australia (both 42%) have sought most likely to deliver a better any advice about their children’s understanding of the monetary In total, almost half (46%) of university education. implications of a university parents around the world with education (40%). New children across all educational Of parents who obtained advice, possibilities are most likely to be stages have paid for additional more than seven in 10 say that suggested online – via an advice tutoring for a child during at least they learned of possibilities and website (38%) or discussion one stage, a proportion that rises options they had not previously forum (35%) – or by specialists, to over seven in 10 in China (74%), considered (72%), that it gave such as teachers and education India (71%) and Indonesia (71%). them a more realistic view of advisers (both 36%). the options available (71%) or In contrast, only around one in that it increased their confidence four parents in the USA (26%), (71%). Around two thirds say Giving an extra boost the UK (23%) and Canada that, by seeking advice, they (23%), and one in five parents avoided making mistakes (67%), Parents are keen to provide extra in Australia (21%) and France relieved their worries (67%), educational support for their (20%), have paid for tutoring. gained a better understanding children. Nearly four in five (78%) There is, however, clearly of the financial implications have paid or would consider appetite for additional tutoring (66%), or were alerted to barriers paying for additional tutoring in these countries, with at least and complications they had during at least one stage of their a further two in five parents in overlooked previously (65%). children’s education. This rises to each country open to considering around nine in 10 parents in the option (UK 42%, USA 43%, The various sources of advice China (93%), Indonesia (92%), Canada 44%, France 49% and consulted by parents offer India (89%) and Malaysia (88%). Australia 50%).

Parents benefit by seeking advice about their children’s university education

Learned of possibilities/options I hadn’t considered 72%

Increased confidence 71%

More realistic view of the options available 71%

Avoided making mistakes 67%

Relieved worries 67%

Better understanding of financial implications 66%

Learned of barriers/complications I hadn’t considered 65%

Q: What benefits, if any, did you get from the sources of advice that you used? (Base: Parents who have sought advice about their child’s university education)

16 The Value of Education Learning for life Not all parents think extra tutoring in China (68%), Taiwan (59%), is necessary. Among those who Malaysia (49%) and India (46%). 66% would not consider it, two in five (40%) think their child does well The cost of tutoring is also a in school without extra help, and barrier for nearly one in five (19%) of parents have a third (33%) simply do not want parents who are not considering sought advice to push their child too hard. This it. This is particularly the case about their child’s reluctance to overburden children in the UK (36%), Turkey (32%), is strongest among parents who France (31%) and Australia (30%). university education would not consider tutoring

Most parents have paid or would consider paying for additional tutoring for their children

78% Average 46% have paid or would 32% consider paying for additional tutoring

China 74% 19%

Indonesia 71% 21%

India 71% 18%

Malaysia 63% 26%

Singapore 59% 27%

Taiwan 59% 19%

Turkey 57% 20%

Hong Kong 56% 22%

UAE 51% 23%

Brazil 35% 35%

Mexico 26% 49%

USA 26% 43%

Canada 23% 44%

UK 23% 42%

Australia 21% 50%

France 20% 49%

Have paid for additional tutoring Have not paid, but would consider paying

Q: Have you paid or would you consider paying for any additional tutoring for your child at any of the following stages of their education: primary school, secondary school or university? (Base: All parents)

17 Sound foundations for a successful life

The path to their children to gain from their important benefit of the university university education is that they experience, with this proportion adulthood become independent (86%), even greater in the emerging that they learn to be financially economies of Malaysia (88%), Parents view university as a rite responsible (84%) or that they Turkey, India (both 86%), Mexico of passage into adulthood for become socially confident (83%). (83%) and Indonesia (81%). their children. Non-academic While independence is highly softer skills – such as the ability valued across the world, it is Fewer parents think participating to live independently, to manage important to an especially high in creative arts (52%) or sports their money responsibly and to proportion of parents in Indonesia (51%) is important, showing that socialise with confidence – are (95%), China (93%), Taiwan and organised extra-curricular activities seen as even more important Mexico (both 91%). are not necessarily required than traditional academic learning. to foster the independence, Developing IT skills is important responsibility and confidence they For more than four in five parents, too – nearly three-quarters want their children to gain from what is most important for (71%) of parents think this is an university.

Parents see independence as the most important quality students gain from university

86% 84% 83% 78% Becoming Learning to become Being socially Becoming independent financially responsible confident knowledgeable about the wider world

75% 72% 71% 70% Developing strong Mixing with people from Developing Excelling leadership skills a diverse range of IT skills academically backgrounds

Q: How important, if at all, do you think it is for students to gain or experience the following from their university education? A: Important or extremely important. (Base: All parents)

18 The Value of Education Learning for life 47% of parents think their child’s generation faces a tougher job market than they did

Wider skills for a that a postgraduate degree was with almost half (45%) of parents more necessary (21%) for their ranking these within the top tougher market own generation. Just over a third three most valuable aspects of think that there is no difference university in preparing students Parents see the job market between the two generations in for life after graduation. as increasingly competitive, terms of the job market (34%) or regardless of the educational the necessity of a postgraduate Analytical thinking is also valued stage of their children. Nearly half degree (36%). highly (40% of parents rank it in think it is harder for their child’s the top three), as is learning to generation to find a job after In this perceived tougher study independently (41%) and finishing their education than job market, pure academic live independently (39%). it was for their own generation achievement is no longer seen (47%) or that it is more necessary as enough to give students a In contrast, course-specific skills to have a postgraduate degree to competitive edge: parents expect are seen as less important. Fewer stand out in the job market (43%). to equip their children than three in 10 (29%) parents with a broader set of abilities. rank this in the top three things Only around a fifth think the job Enhanced confidence/social that help students prepare for life market was tougher (19%) and skills are the most essential, after graduation.

19 Getting the is working too hard at university, (30%) than that they spend too than that they are not working much time (21%). This is also balance right hard enough. true of parents in Canada (23% compared to 17%) and Taiwan Many parents think students work In Asia and the Middle East, (35% compared to 28%). too hard and so are concerned this imbalance is particularly their children do not have enough pronounced. In the UAE, 39% of Of those parents who would time to develop the softer skills parents think their child spends prefer their children to spend they need to succeed in the job too much time on independent less time on independent study market. study at university, compared to at university, over half (56%) say only 5% who think they do not it is to reduce their stress levels. Around the world, more than a spend enough time. There is also However, parents also want their quarter (28%) of parents with a wide gap in Indonesia (36% children to have more time for children in or university compared to 10%), Singapore hobbies and interests (46%), to education feel that their child (30% compared to 10%), India develop social skills (38%) or to spends too much time on (29% compared to 17%) and gain real-world experience (37%). independent study outside their Hong Kong (42% compared taught classes, compared to a to 26%). Conversely, half (50%) of those fifth (20%) who feel they do not parents who think their children spend enough time on it. In contrast, parents in France are should spend more time studying more likely to think their child outside of their taught university In most countries, parents are does not spend enough time on classes say this is to better more likely to think that their child independent study at university prepare them for the demands of 20% of parents with a child at university think their child does not spend enough time on independent study

20 The Value of Education Learning for life the real world. Achieving the right strong in Taiwan (72%), Mexico In countries where a university balance to best prepare students (63%), Turkey (61%), Brazil (58%) education is seen as offering poor for adulthood is an ongoing and France (52%). value by the majority of parents, challenge for universities. the concern that it does not teach Parents of children in state-funded applicable real world skills is education (at any stage) are more strongest in Taiwan (59%), Turkey Universities: could likely to think university offers (52%) and France (48%). Parents do better poor value for money (45%) than in Taiwan are particularly likely do those whose children are to think university does not do 4 Given the large numbers of being privately educated (37%) . enough to enhance their children’s parents hoping that their children career prospects (64%), while will study to university level, a key Of parents who think that a there is heightened concern that question is whether universities university education represents academic standards are not high offer a good return on investment. poor value, nearly half (48%) enough in Brazil (56%), Turkey believe that it does not teach (47%) and Mexico (46%). Many parents believe that this skills that are applicable in the real is not the case – more than two world, while a similar proportion By not equipping students with in five (42%)3 parents around (45%) think it does not do enough the right skills to stand out in the the world think that a university to enhance career prospects, and job market, universities risk failing education offers poor value for a third (33%) think that academic to meet the demands of the 5 money. This view is particularly standards are not high enough . modern world.

3, 4, 5 Data excludes mainland China

In many countries, parents think a university education offers poor value for money

72%

63% 61% 58% 52% 46% 42% 42% 40% 37% 36% 33% 28% 22% 22% 16%

UK Brazil USA UAE India Taiwan Mexico Turkey France Canada Australia Malaysia Average Indonesia Singapore Hong Kong

Q: Do you think a university education in your country offers good value for money, or not? A: Fairly or very poor value for money. (Base: All parents, excluding mainland China)

21 58% of parents think a university education is unaffordable for most people in their country

IFunding the future

Out of reach and Malaysia (38%) think that that grandparents will share the university is unaffordable for most financial burden; however, among people in their country, with this those with children currently at Although some parents doubt figure dropping to just over a third university, only 13% say that whether going to university offers (34%) in Hong Kong. grandparents are contributing or good value for money, many expected to contribute. Parents others see it as a pathway to of university students in China future success for their children. Who pays? (41%), Turkey (31%) and India However, a university education (23%) are the most likely to comes at a significant cost – When it comes to funding a say grandparents are sharing or which is not always seen as being university education, typically it is expected to share the cost. within financial reach. parents who provide the money. More than two in five parents Globally, almost three in five More than nine in 10 (95%) (41%) whose children are in (58%)6 parents think that parents who are expecting their secondary school or below a university education is children to go to university plan expect their children to contribute unaffordable for most people to contribute to their tuition towards their own future in their country. This view is fees and/or living costs. Among university costs, while under particularly strong in Europe parents who already have a child a third (32%) of parents with and the Americas, with 79% of at university, the same proportion children currently at university say parents in France and 71% in the (95%) say that they are currently their children are actually making UK, USA and Mexico believing contributing or planning to or expected to make a financial that university is unaffordable. contribute to the cost. contribution. University students are most likely to bear at least Parents in Asia feel differently. Almost one in five (19%) part of the cost themselves in the Only around two in five parents in parents whose children are yet USA (62%), Canada and Australia Taiwan (44%), Singapore (41%) to reach university anticipate (both 59%).

6 Data excludes mainland China

22 The Value of Education Learning for life The need to save children’s future university costs Among parents with children through savings, and only 14% at university who have not yet think they will rely entirely on day- saved anything towards the cost, Parents recognise the need to to-day income. However, among over half (52%) say they did not save to help pay for their children’s parents whose children are have enough money left to do so university education – but many currently at university, just over after paying day-to-day bills, while do not put this into action. half (53%) are using or plan to nearly a quarter (23%) say they use saved funds, and three in 10 had just not given it any thought. Almost three-quarters (72%) of (30%) are reliant or expect to rely parents of pre-primary school entirely on day-to-day income. children think they will fund their

Parents’ expectations to fund their children’s university costs with savings and investments do not always reflect reality

72%

63%

57% 53%

30%

23% 19%

14%

Current of child

Pre-primary Primary Secondary University

With general savings/investments/insurance or specific education savings plan With day-to-day income entirely

Q: Thinking about the people who may cover or contribute towards your child’s university education costs, where do you think this money will come from? A: Parents’ contribution from: General savings/investments/insurance, Specific education savings plan, Day-to-day income entirely (e.g. from full/part-time job). (Base: Parents who think they will contribute or are currently contributing to their children’s university costs)

23 The need to borrow

The struggle to save, and the difficulty of paying for university costs from day-to-day income, leads many parents to seek to borrow money to fund university education.

More than a quarter (27%) of parents of pre-primary school children who are expecting their children to go to university think they will have to take out a loan, while the same proportion (27%) of parents whose children are currently at university have taken out a loan or expect to have to do so.

Parents who expect to borrow, or are currently borrowing, to pay for university costs recognise the implications, expecting to spend on average 6.7 years repaying the debt after their children have finished their education. However, estimated repayment times vary considerably by country: parents expect to be paying off their debt for over nine years in China (9.8 years), Australia (9.3 years) and Malaysia (9 years), but for only around four years in Indonesia a child at university say that their Loans to study (3.9 years), Turkey (4.2 years) and child is actually contributing or the UAE (4.4 years). expects to contribute. Parents know their children may have to borrow money to Less than a third (31%) of parents fund their university studies. First steps with pre-primary school children More than two in five (42%) think that their child will save up to financial parents with pre-primary school to contribute towards the cost of children think their children independence their own university education. will fund their own university This mirrors reality, with a similar costs through borrowing, as do Learning to become financially proportion (28%) of parents an equal proportion of parents responsible – which 84% saying their university age children whose children are currently at of parents believe to be an are using or expect to use their university (42%). important benefit of a university own savings to contribute. education – can start with children Parents are aware that their contributing to the cost of their Getting a job while at university children’s borrowing may not own university studies. is another way for children to be confined to specific fund their university education. loans, and could also include For many parents, the expectation Nearly half (45%) of parents of general debt such as personal that children will contribute to pre-primary school children think loans and credit cards. Just their own university costs exists that their children will have to over one in 10 (11%) parents before they even begin primary work, either part time or full time, of pre-primary school children school education. More than two while they are studying, which expect this to be the case, as in five (43%) parents of pre- is consistent with the 47% of do a similar proportion (13%) of primary school children expect parents who say their child is parents with children currently at that, once their child reaches currently contributing or expected university. university, that child will personally to contribute to their university contribute to their own tuition costs through their earnings from fees and/or living costs. However, paid work. only a third (33%) of parents with

24 The Value of Education Learning for life Parents expect their own and their children’s university debts will 27% take years to repay 6.7 years Average of parents 7.5 years supporting a child at 9.8 China university think they 8.0 9.3 will need to borrow Australia money to cover the 8.9 9.0 tuition and/or living Malaysia costs 9.4 8.8 USA 9.6 8.3 UK 12.4

India 7. 0 6.3 7. 0 Singapore 5.9 6.6 Hong Kong 6.1 6.1 Canada 6.7 6.0 Brazil 6.8 5.6 France Paying it back Data not available 5.2 Taiwan Parents expect their children to be 6.3 repaying their own university debt 4.6 on average for 7.5 years after they Mexico finish their university education. 4.3 In some countries, the timescales 4.4 UAE are less optimistic – parents in 3.6 the UK believe it will take their children 12.4 years to pay off their 4.2 Turkey university debts, those in the Data not available USA 9.6 years, and in Malaysia 3.9 9.4 years. Repayment periods Indonesia are expected to be much shorter 3.2 in Indonesia (3.2 years), the UAE (3.6 years) and Mexico (4.3 years). Parents’ debt

Parents tend to underestimate Children’s debt how long it will take their child to repay their university debts. Q: You mentioned that you/your partner are funding or expect to fund your child’s Those with pre-primary school university costs through borrowing. How long do you expect it to take to pay off this children expect it will take 7 debt once your child finishes their university education? (Base: Parents who expect years on average for them to to borrow money or have borrowed money to fund their child’s university education) repay their loans after graduating. However, parents whose children Q: You mentioned that your child is funding or expected to fund their university are currently at university, and so costs through borrowing. How long do you expect it to take them to pay off this can be expected to have a more debt once they finish their university education? (Base: Parents who expect their realistic assessment, anticipate it children to borrow money or whose children have borrowed money to fund their will take 8.9 years. own university education)

25 Broadening horizons: higher education abroad

Increasing More than three-quarters Kong (74%), Indonesia (74%) and (78%) rate students becoming Singapore (74%) would consider opportunities knowledgeable about the wider the idea. In contrast, only around world as a key benefit of a half of parents in Canada (51%), Half (50%) of parents around the university education, while over Australia (52%) and France (53%) world believe that their children’s half (51%) value the opportunity would consider it. generation has more opportunity to live abroad and to experience for study or travel abroad than different cultures. When it comes to postgraduate their own generation did at the study, an especially high same age. proportion of parents in India When to go, and for (88%), Turkey (83%), Malaysia and Less than a fifth (16%) say that how long China (both 82%) would consider this opportunity was greater for sending their child abroad to study, their own generation, while the Given these benefits, it is not compared with lower proportions remainder (34%) think that the surprising that over three-quarters in Australia (52%), Canada (53%) level of opportunity is the same (77%) of parents – including the and the USA (59%). for their children’s generation as it majority in each country surveyed was for theirs. – would consider sending their However, parents’ ambitions child to university abroad for either of an international education This difference between undergraduate or postgraduate vary according to the age of generations is strongest in study. their children. Although more Turkey, where two thirds (66%) than four in five (82%) parents of parents think there is more Nearly two thirds (64%) with pre-primary school children opportunity for their children’s of parents would consider would consider sending their generation, while just over one in sending their child abroad for child abroad to university, the 10 (11%) have the opposite view. undergraduate study, while even proportion is smaller for parents There is a similar generational more, seven in 10 (70%), would with older children, with less than difference in France (64% and consider it for postgraduate study. three-quarters of parents whose 10%) and China (64% and 19%). children are currently in secondary Parents in Asian countries are school (74%) or university (72%) Parents see important most receptive to the idea of saying they are considering an experiences to be gained by sending their child abroad for international university education. students who take advantage undergraduate study. Four in five of this increased opportunity parents in Malaysia (80%) and to study at university abroad. nearly three-quarters in Hong

26 The Value of Education Learning for life 77% of parents would consider sending their child to university abroad

Parents’ hopes of an international university education for their children vary with age

82% 78% 74% 72%

Pre-primary Primary Secondary University

Current educational stage of child

Q: Would you consider sending your child to university abroad, for either undergraduate or postgraduate study? A: Yes. (Base: Parents who expect their children to go to or whose children are currently at university)

27 34% of parents who would not consider sending their child to university abroad say cost is a barrier

Cost is a barrier not consider sending them to A similar proportion of mothers university abroad, less than a (24%) and fathers (21%) say that third (31%) say they would like to they would not consider sending For parents who would not but cannot afford it, while among their child to study at university consider sending their child to parents with children of university abroad, but for different reasons. study at university abroad, cost age, this proportion is higher Mothers are more likely to say is the main barrier. Over a third (42%). that they do not want their child (34%) around the world say that to be so far from home (25%, they would like to but cannot The quality of education available compared to 21% of fathers). afford it, and this proportion is is also a factor in deterring parents Fathers are more inclined to think higher still in Hong Kong (40%), from considering an international it is not worth the money (16%, Malaysia (43%) and Mexico university education for their compared to 11% of mothers) (48%), rising to nearly three in children. Of parents who would or that it does not deliver any five in Turkey (59%) and Indonesia not consider this option, over benefit (15%, compared to 12% (58%). a quarter (26%) think that their of mothers). home country offers a superior Parents with older children are university education; rising to more conscious of this cost around half in Singapore (53%), barrier. Of those with pre-primary Malaysia (48%) and India (47%). school children who would

28 The Value of Education Learning for life Worth paying more than they would to educate their More parents in China (69%), child in their own country. Around Hong Kong (62%), India and half (45%) would consider paying Taiwan (both 59%) would The benefits to be gained from at least a quarter more, while consider paying at least a quarter studying abroad come at a nearly a quarter (24%) would more for their children to study at cost. Four in five (80%) parents consider paying at least half as university abroad. who are open to the idea of an much again for their children to go international university education to university abroad. would consider paying more for it

Parents would consider paying extra for their child to have an international university education

Average 24% 45%

China 39% 69%

Hong Kong 29% 62%

India 33% 59%

Taiwan 33% 59%

Indonesia 32% 52%

Singapore 30% 50%

Mexico 22% 50%

Turkey 28% 46%

Malaysia 22% 46%

Canada 19% 35%

Brazil 15% 34%

UAE 19% 33%

USA 18% 33%

UK 9% 23%

Australia 12% 19%

France 7% 18%

Consider paying at least 25% more Consider paying at least 50% more

Q: Compared to the cost of going to university in your own country, how much extra, if anything, would you consider paying for your child to go to university abroad? (Base: Parents who would consider sending their child to university abroad)

29 Practical steps for planning your child’s education

Here are some important insights and practical actions drawn from the research findings, for parents to consider when planning for their children’s education.

Plan for higher ambitions Half (50%) of parents say a postgraduate qualification is a necessity for their children to achieve important goals in their lives.

Think about the financial implications of your children staying at university for longer, and have a plan for meeting these costs.

Ask for advice Around seven in 10 parents who sought advice about their children’s university education say that they learned about possibilities and options they had not considered (72%) or became aware of barriers and complications they had overlooked (65%).

Don’t be afraid to seek advice. Make the most of the many resources available to give yourself a better idea of the opportunities and pitfalls involved in making university choices.

Allow for extra Nearly two in five (39%) parents have paid for additional tutoring for their primary school children. However, almost one in five (19%) parents who would not consider tutoring say this is due to the cost.

Be sure to allocate sufficient money to support your child’s educational development from the earliest stages.

Encourage independence More than four in five parents say that becoming independent (86%) or learning to become financially responsible (84%) are important benefits of a university education. Nearly a third (32%) of children currently at university are helping or planning to help fund their education through saving, borrowing, paid work or other means.

Becoming financially responsible is an essential step towards adulthood. Start teaching your children how to manage their finances from an early age.

Save more, repay quicker Parents anticipate that money they borrow to fund their child’s university costs will take an average of 6.7 years to repay. Nearly three-quarters (72%) of parents with a pre-primary school child think they will use savings to cover their future costs; however, only 53% of those with a child currently at university are using or planning to use savings.

To minimise the impact of borrowing, start saving early and don’t let your plans get derailed.

30 The Value of Education Learning for life 31 The research

The Value of Education is an independent consumer research study into global education trends, commissioned by HSBC. It provides authoritative insights into parents’ attitudes and behaviour towards their children’s education around the world.

This report, Learning for life, is the second in the series and represents the views of 5,550 parents in 16 countries and territories:

Ŷ Australia Ŷ Brazil Ŷ Canada Ŷ China Ŷ France Ŷ Hong Kong Ŷ India Ŷ Indonesia Ŷ Malaysia Ŷ Mexico Ŷ Singapore Ŷ Taiwan Ŷ Turkey Ŷ United Arab Emirates Ŷ Ŷ

The findings are based on a nationally representative survey of parents in each country who have at least one child aged 23 or younger currently (or soon to be) in education, and who are solely or partially responsible for making decisions about their child’s education. The research was conducted online by Ipsos MORI in March and April 2015, with additional face-to-face interviews in the UAE.

Global figures are the average of all countries and territories surveyed, unless otherwise stated. Figures have been rounded to the nearest whole number.

HSBC Holdings plc, the parent company of the HSBC Group, is headquartered in London. The Group serves customers worldwide from over 6,100 offices in 73 countries and territories in Asia, Europe, North and America, and the Middle East and North Africa. With assets of US$2,670bn at 31 March 2015, HSBC is one of the world’s largest banking and financial services organisations.

32 The Value of Education Learning for life Definitions

Here are definitions of some of the words and phrases used in this report: State-funded education Primary school Educational institutions funded Also known as elementary school. fully or partially by taxation, and where places are offered to most/ Secondary school all children without further charge. Also known as high school.

Private education Vocational college Educational institutions funded Also known as trade, technical or fully or partially by charging tuition career college. fees, and where places are offered selectively. University Also known as , Pre- higher education or college. From birth through to pre-school or .

33 The Value of Education programme

Since The Value of Education Key findings included: programme began in 2014, more than 10,000 parents worldwide Ŷ More than half (58%) of have been surveyed. parents say that paying for a child’s education is the best The research findings have investment you can make. helped HSBC to understand and Ŷ When presented with different meet the needs of its customers options for supporting their worldwide. child financially in life, parents would ideally allocate 42% of their funds to education, much The Value of more than for anything else. Education 2014 Ŷ More than half (51%) of parents wish they had started Springboard for success was to plan and save earlier for the first report and represented their child’s education. the views of 4,592 parents in Ŷ The USA is regarded as 15 countries and territories. It offering the highest quality focused on parents’ attitudes to education in the world, with education, and their expectations 51% of parents ranking it in of what education should deliver their top three countries. This at each stage of their children’s is followed by the UK (38%), academic career. It also explored Germany (27%), Australia parents’ feelings towards (25%) and (25%). privately-funded and international education, and their approaches to funding these options.

34 The Value of Education Learning for life 35 © HSBC Holdings plc 2015 All rights reserved.

Excerpts from this report may be used or quoted, provided they are accompanied by the following attribution: ‘Reproduced with permission from The Value of Education Learning for life, published in 2015 by HSBC Holdings plc.’

HSBC is a trademark of HSBC Holdings plc and all rights in and to HSBC vest in HSBC Holdings plc. Other than as provided above, you may not use or reproduce the HSBC trademark, logo or brand name.

Published by HSBC Holdings plc, London www.hsbc.com > Retail Banking and Wealth Management

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