How to deal with rising cost of education
MANILA – The rising cost of education has tapered a bit over the last decade but it is still huge.
The Department of Education (DepEd) has been making some headway in improving the public school system but this is a long struggle, according to financial adviser Salve Duplito.
“Public schools now are still crowded, lack well-trained teachers and funding for technology,” she said on ANC’s “On The Money.”
Duplito noted that the rising cost of education presents a harsh reality, and eventually, only the very rich will be able to afford quality education in the country. The rest of the population will likely go into debt, sell assets, or forego investing for their own retirement to afford quality education.
Citing a study by Pathways for Higher Education, Duplito said some public schools provide quality education, allowing its students to beat those from the country’s top private schools in national examinations.
There are three factors for quality education, the study said: very good principal, good teacher trainings, and committed parents.
“When choosing a school, don’t just go for the ones with the best names. You can look for high quality, low cost education by considering public schools with the best principals and those that train their teachers well,” said Duplito.
To deal with the rising cost, Duplito shared these strategies:
1) Create a sinking fund for education expenses
Set up a separate account dedicated solely for tuition expenses, and transfer money monthly from your expense account to this account.
2) For future education expenses (at least 5-year horizon), put your money in a low-cost mutual fund or unit investment trust fund
Go for index funds with no entry fees and a management of at most 1.5 percent.
3) If you know how to pick stocks, look for 10 stocks that are not overpriced
Choose companies with good management, who are transparent and accountable, and whose products and business model can survive the test of time.
“The worst thing that parents can do is to depend on current income to pay for education costs. Anything can happen to us. The ‘bahala na’ strategy is the worst strategy for paying for education costs,” said Duplito.
She added that education is an investment, and its rewards are far greater than the cost of tuition.