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Increased competition for places pushes up school fees around the world

ECA’s global average tuition cost across all ages for the 2019/2020 academic year has risen to USD 16 404, a 1.3% increase on last year. However, regional changes in US dollars ranged from 5.1% increases in Asia and South America to a 1.7% decrease in Europe.

The number of international schools is rising quickly around much of the world. This trend is due to growing demand from the ever-increasing number of expatriates and more affluent local families who choose to send their children to international schools. This competition for places is one of the biggest global drivers of fees. 

Asia on the rise

Asian locations have been some of the biggest risers in our rankings this year, including Myanmar, Thailand, Laos, Vietnam, Indonesia and Cambodia. The Thai baht has been one of the best performing currencies against the US dollar over the last year making school places more expensive for foreigners. In Myanmar the expanding middle class has led to greater demand for high quality education. Limited places combined with increased demand for international teachers pushing up salaries has led to large fee increases. Similar changes are seen across the entire Asia region with growing economies attracting business, investment and expatriates which, combined with rising demand from locals, have pushed up tuition fees. 

However, India remains the cheapest location in Asia for school fees, positioned 135th in our rankings with average secondary school fees of USD 11 857 - 40% lower than our global average of USD 19 588. India, unlike most of the world, has a private school sector education that is larger than its public school system. Public schools are seen as inferior and do not offer the bilingual education necessary for pupils to compete for places in Western universities. The high supply means prices for international schools have been stable and with new ‘budget’ international schools opening up more frequently, this pattern is unlikely to change.

Europe falls in rankings

Uncertainty surrounding Brexit and loose monetary policy from the ECB weakened the euro, meaning that almost every European country fell in our rankings. Portugal and Germany saw some of the biggest drops, each falling ten places to 58th and 59th places respectively. One exception to the European trend was Cyprus where average prices rose in US dollars despite the weaker euro due to an influx of expats and strong demand from locals for international schooling, leading to significant competition and therefore rising prices. 

Russia, another country to rise in the rankings, owes its increasing international school fees to worsening relationships with Europe. Teachers with European passports were denied visas in 2019 which contributed to the closure of some of the larger international schools including The Anglo-American School in St. Petersburg. These closures have lowered supply of international schools in Russia which has in turn led to higher fees. 

Luxembourg and Finland are among the most expensive places in Europe for expatriates to live, according to ECA’s cost of living survey, but for international school fees they are only 100th and 96th respectively in our global rankings. Their low positions stem from government policies that mean private school fees are subsidised, but global mobility (GM) managers must ensure children qualify for them as they are not always available to foreigners.

Average secondary school fees rose by 4.1% from GBP 26 248 to GBP 27 316 in the UK but a weak pound meant a drop in ranking. A major concern for international schools with regard to Brexit is the lost labour it could cause. Teacher salaries account for a huge part of any international school fee and difficulty in attracting top talent can incur higher costs. In addition to this, if the UK is less attractive to business in the long-term, student numbers could fall.

A change at the top?

ECA’s Education reports showed that China remains the most expensive location for secondary school education at USD 40 689 per year. This is partly fuelled by expatriates, though like many other locations, there is a growing demand from locals for a Western curriculum and qualifications. However, recent depreciations in the yuan have made the fees a little more affordable for assignees. The United States of America has been steadily rising in our rankings for the past few years due to its strong currency and if the trends continue, it will overtake China to be our most expensive location for secondary school education next year. The USA is already top for our kindergarten and primary rankings. 

Other notable changes in our top 10 include Israel, which has now risen to 9th position from 13th having been buoyed by a strong currency. It remains the most expensive country for secondary education schooling in the Middle East. 

 

Global mobility managers: what to consider?

ECA’s Managing Mobility Survey found 53% of participants citing children’s issues as a factor in hiring. Global mobility (GM) managers must ease the transition from home to host country education, often through providing a place at an international school. ECA’s Benefits for International Assignment Survey (BIA) showed that 92% of American, 85% of European and 75% of Asian companies aided schooling costs for their assignees. The cost of providing this benefit can be huge, however, and weighing the benefit with the assignment will be a key part of any GM manager’s remit.

ECA’s education cost averages are based purely on tuition fees, though this isn’t the only type of fee associated with providing this benefit. Registration, exams, books and transport are all additional costs that are charged on top of tuition. Although these expenses are mandatory, they are not usually covered. These additional costs would also be charged in the home country and, therefore, they are not usually included as part of the education package on assignment. The exceptions are registration fees (97%) and exam fees (63%) which are paid by more than half of companies. 

Schools can also vary their tuition rates depending on the curriculum offered. Highly sought-after American and British schools tend to be the most expensive while others are subsidised by the home country. For example, French schools run by the Agency for French education abroad (AEFE), offer substantially reduced fees for French expats. It is also common for students with at least one parent whose heritage matches the nationality of the school to benefit from discounts. 

Further to this, assignees in developed locations often bypass international schools entirely. State schools may be closer to the assignee’s home and offer wider choice and cheaper alternatives to costly international schools but provide a similar level of education. For most of the world, however, local schooling cannot be used due to the lack of internationally recognised qualifications, unfamiliar languages and strict criteria for admitting foreign students. This was shown as a concern by expatriates in the Managing Mobility Survey, with over 80% of assignees regarding the difficulty of reintegrating into home country education systems as an important or very important factor in choosing host education services. In particular, the language issue was highlighted in our Benefits for International Assignments survey where using a state school is required by only 17% of companies with an Asian headquarters but by 58% of companies with an Australasian headquarters. Sometimes, international schools are the only option.

Given the importance of schooling to family life on assignment, as well as the continuing rise in the cost of international schools around the world, global mobility managers will need to keep up to date with changes.

  FIND OUT MORE

ECA International’s Education Reports contain listings of tuition and other fees for international schools in 159 countries, so you can budget fully for this important assignee benefit. ECA conducted research on over 2 700 schools around the world during 2019/2020 to bring ECA subscribers the latest figures.

Our detailed and extensive benefits data is also available to use pre-loaded in our assignment cost projections, which can be purchased on demand or through our Assignment Management System, ECAEnterprise.

  Please contact us to speak to a member of our team directly.

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