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Muyela Roberto is a business journalist at TUKO.co.ke with over 9 years of experience in the digital media, offering deep insights into Kenyan and global economic trends.
Is paying school fees for your child an investment for the parent or guardian, or is it simply an endeavour that benefits the child alone? This is a question many, especially in the African setting, would ask.
Many of us have grown up in societies where parents have children as a form of "insurance policy" for their old age, expecting that the children will eventually support them.
However, conflicts often arise when children fail to meet these expectations, with parents frequently citing that they sacrificed everything for their education.
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With the burden of school fees continuing to weigh heavily on many families, one might wonder what the best method is to fund a child's education.
Should you rely on loans, salaries, harambees, education funds, or business profits? This question becomes even more pressing in light of rising education costs and limited financial options for many families.
In Kenya, the Higher Education Funding (HELB) provides loans for studies in universities and colleges, but its funding model allows the beneficiaries to pay up the loans themselves.
A recent report from SACCOs in Kenya revealed that paying for education remains one of the most capital-intensive endeavours for families, second only to land acquisition.
The report showed that Kenyans borrowed up to KSh 96.3 billion to pay school fees out of the KSh 460.5 billion that SACCOs issued in loans in 2023.
Most of the borrowed funds went towards land and housing (KSh 124 billion), agriculture (KSh 78 billion), trade (KSh 58 billion), consumption and social services (KSh 43 billion), while finance, investments, and insurance accounted for KSh 28 billion.
While the report did not specify whether the loans for school fees were for personal education or dependents, it is safe to assume that a significant portion of the funds were used for the education of children and other dependents.
To gain more insight into this growing trend, TUKO.co.ke reached out to personal finance expert Margaret Njeri, who shared her thoughts on the issue.
According to Njeri, while providing quality education for children is vital, relying on loans to fund their education is not always the best approach.
"In as much as educating your child is as important as building a family tree, borrowing money to pay your child's education fees is not, and will never be, the best option. Relying heavily on borrowing for school fees is not ideal in the long term, as it can lead to financial stress," Njeri advised.
She highlighted that parents should focus on saving and planning ahead for educational expenses, suggesting a more balanced approach that includes saving and budgeting.
She said borrowing should come as a last resort.
According to Njeri, various fee payment methods have their pros and cons. For instance:
Njeri suggested a balanced approach, combining different sources to reduce the financial strain on parents and provide flexibility.
Practical Steps to Manage School Fees
For families living paycheck to paycheck, Njeri recommends small, gradual changes in spending habits to create an education fund. These include:
"Focus on paying off small debts first or the highest interest debts. As debt reduces, more money can be allocated to savings for school fees," Njeri added.
Njeri emphasised the importance of long-term financial planning, especially in avoiding last-minute rushes to secure money to pay for fees.
"Many parents don't know the importance of starting small and thinking long term, but setting up a dedicated education fund is the best way to avoid the late-minute rush."
She also stressed the importance of financial literacy, urging parents to invest in educating themselves about money management.
"Ignorance is no defence. Any parent should invest in financial knowledge because the more informed you are, the better decisions you will make when saving and budgeting."
For those who find themselves needing to borrow for school fees, Njeri recommended borrowing only what is necessary and having a solid repayment plan.
This, she argued, can minimize financial stress and set families on a path to long-term stability.
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Students in class
Personal Finance specialist Margaret Njeri
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