In the final article to wrap up MyPF’s series on educational costs, here’s an overview of expenditure involving private universities in Malaysia and overseas, as well as an estimate of how much parents might need to invest into their child’s tertiary education.
Make sure you check out part one of this story, which covers government and public options for students after they finish Form 5.
Malaysian private universities
According to data from OCBC, a Malaysian private university is estimated to cost RM110,000 for a whole course of 3-4 years. Naturally, this will vary according to your child’s field of study.
Overseas options
This is, of course, the most expensive route. If you opt to send your child to an university overseas, you might be looking at the following investment:
- Australia: RM263,000
- United Kingdom: RM496,000
- United States: RM518,000
Tax reliefs and government assistance
Parents can still invest in SSPN Prime for their child’s tertiary education and be eligible for tax relief of up to RM8,000.
The inland revenue board (LHDN) has specific clauses for tax relief for pre-university and university students:
- RM2,000 for each unmarried child of 18 years and above who receives full-time education (A-Level, certificate, matriculation or preparatory courses);
- RM8,000 for each unmarried child of 18 years and above who receives full education in respect of a diploma or degree, in or outside Malaysia.
The government also offers PTPTN loans to students from lower-income backgrounds. With very low interest rates, the student would only need to repay these after they have finished their education.
You could also consider applying for government scholarships, which include:
- dermasiswa B40 programme (B40);
- sponsorship of local degree programme (PIDN);
- national sponsorship programme (PPN)
- programme in Japan, Korea, France and Germany (JKPJ);
- sponsorship for SPM leavers (local universities).
So, how much will this all cost?
There are always hidden costs to be considered when your child pursues his or her tertiary education. These include accommodation; water, electricity, gas and other fuels; transport; educational services charged by the university; insurance; and other financial services.
Based on the statistics department’s data, Malaysians aged 15-30 spend an average of RM1,710 per month on housing (RM1,026), transport (RM480), education services (RM34), and insurance and financial services (RM170).
So, for six years of education, one could estimate they might spend RM123,120 (RM1,710 x 12 months x 6 years). Studying in a public university could, therefore, cost RM131,120 (RM8,000 in tuition + hidden costs of RM123,120).
Meanwhile, studying in a private university overseas could incur up to RM679,634 (RM556,514 inclusive of a pre-university programme + RM123,120).
None of this factors in the impact of inflation, which is approximately 7-8% per annum for overseas students. According to data from USNews, tuition costs in the US have increased by an average of 3.4% annually from 2012 (US$30,658) to last year (US$44,433).
At the same time, the ringgit has significantly weakened by an average of 3.8% every year from 2012 to 2023.
Hopefully, all this information will help you as you plan for your child’s education, be it at the tertiary, secondary, primary or kindergarten level. All the best!
This article was written by Su-Wei Ho for MyPF. To simplify and grow your personal finances, follow MyPF on Facebook and Instagram.
Read more articles from MyPF here.