When you child has finished their army service and have started their adult life, if you think that your financial responsibility as parents towards your offspring stops, then think again. Your child now wants to study for a degree, get your cheque book ready since parents on average will part with a hefty NIS 14,000 p/year.
There is an enormous difference in tuition fees between the Universities, NIS 12,000 and Private Colleges NIS 30,000. It does not matter where the student studies, they should always apply for a scholarship or a student grant. The army deposit that the soldier receives upon their release can be used for the first year of studies.
Tuition fees are not the most expensive item that the student incurs but accommodation. 38% of students will live at home, only 8% live in dorms and amazing 54% will choose to rent an apartment. The average rent that the student pays is NIS 1,204 but in reality for the 54% of students rent is considerable higher.
The student will spend NIS 4,874 on average per month and if they work their average wage is NIS 3,742. So what happens to the difference? Believe it or not 48% will be dependent on their parents for financial help.
Here is an example of the average student budget:
|House maintenance + repairs||348|
The question here is what amount do you give as an allowance to the fresh student? If you were diligent parents and started a study fund when the child was young, then you allocate funds according to the amount available. If there is nothing in the kitty, then what is required is to check the budget and see how much you can afford to allocate to your child. It is not good idea to go into overdraft or to take out a loan to pay for studies. If a loan needs to be taken out then the student should, since there are special loans for studies. Studies is one of the few clauses that I encourage to take a loan since it is a long term investment and in the long run the student when they enter the work force will be able to repay the loan. This is completely different to taking out a loan to cover the overdraft.
The most important action that the student needs to take is to make a budget so that they do not start their adult life by spiralling into debt.