Paying for School Fees

Sound financial planning is important for any person, but it becomes especially so once you have dependants, your lovely kids. Those cute, small humans require money, and one of the biggest expenses can be education.

If you have your eyes on a private international school, be ready to pay up. The school fees in Shanghai are among the most expensive in the world, with average yearly prices for pre-kindergarten or nursery at 165,055 RMB (US$25,300), increasing up to 281,110 RMB (US$43,000) for the final years of high school.

Of course international schools aren’t the only option for education. There are fee paying bilingual schools, which fall in the 100,000 to 200,000 RMB range, and local public schools with international curriculum departments, which cost below 100,000 RMB. Some families even opt for home schooling.

I talked to three Shanghai families with young kids to see how they approach financial planning and paying for school fees.

There was a time when recieving expat benefits was more commonplace. This all-inclusive relocation package, paid by big multinational employers, includes school fees on top of housing and medical insurance. A smaller portion of the international community is on this package now. Of the three families I talked to, one is an entrepreneur, and two out of three don’t receive funds from their employer to pay for education.

For Pav, her husband’s company gave them a price range for school fees. She hadn’t thought about school fees until her first child was getting old enough to attend school, and counts her family lucky that the company agreed to cover school fees, including pre-kindergarten. With the recent birth of her second child, she’ll be having that conversation again.

She and her husband have always saved for the lifestyle they wanted, and that future included multiple kids, plus their schooling costs. Upon the arrival of kids, Pav and her husband chose to enrol in life insurance. Their family utilize financial planners at St. James Place to help with expat status and investments in the UK, and Standard Chartered out of Singapore for Asia-based investments.

The family has lived in Shanghai for over four years, and forsee themselves staying another three to five years. Pav says that if they were to move anywhere else in Asia, where she grew up, a school package would be a big deciding factor. If her financial situation changed to a point where the family’s saving ability would take a hit from paying for school fees, Pav would consider other options such as changing schools.

Paty, another parent, has been in Shanghai for six years and hopes her husband’s employer, a small import company, can contribute to education fees in the future for her three-year-old. She said she would discuss with the company before having a second kid. Like Pav, Paty also didn’t think about school fees as a big expense until her daughter was born.

Planning for the next few years, Paty thinks a British international school would be great for elementary school and beyond, but she is also looking into public schools and their international departments for her daughter, prioritising language as well as cost.

The family doesn’t have plans to move, but is unsure how long their Shanghai journey will end up running.

In addition to budgeting and saving every month, Paty has income from property abroad the family could tap into for covering primary and secondary school fees if needed. With the economic impact of COVID-19, she knows the situation could be worse. She suggests to expecting parents that they speak to their employer about an education package.

Greg, founder and executive of a food and beverage company, has known since early on that he would settle in China and raise a family. He has lived here since 2008, and therefore knew the high living costs of Shanghai, including the price range of international school fees. Greg started saving early for the life he envisioned, long before his daughter entered the picture. He considers himself financially literate, and does his own finances and investments. School fees are something his family plans to pay for out of pocket, and are now incorporated as a line item in their budget.

Still, he was shocked by the intensity of pre-kindergarten admissions. His daughter is two years old, but American Greg found the research, school visits, cost, and competitive admission application process to be comparable to getting into college.

A determining factor in financial planning is how long families see themselves living in Shanghai. Another major factor is whether or not employers cover school fees. With an early, clear idea of the future, it’s easier to estimate cost of living and to plan for a desired type of lifestyle for both parents and kids.

Download our full guide to schools in Shanghai from international, bilingual, to pre-kindergarten. Scroll down to the bottom of our homepage and click on the School Directory 2021-2022.