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Can you afford to send your kids to university overseas?

This content is brought to you by LCR Capital*

South African universities have made headlines in recent years, but not for their outstanding academic achievements. Global rankings have seen our universities slipping, with the University of Cape Town, our best internationally ranked university, dropping from 141st in the world in 2014, to 191st in 2016, according to XS World University Rankings.

For all parents, but in particular those with young children, the big question is, where will our universities be in 5, 10, and 15 years’ time? Will South African institutions be equipped to prepare young minds for a future dominated by technology, artificial intelligence, and intense global competition?

For those in doubt, there’s increasing pressure to develop a “backup plan.” Many forward-thinking parents are now preparing for a future in which their children may need to study overseas. But just how much will this back up plan cost?

According to the U.S. College Board, in the United States, the average cost of tuition and fees for the 2016–2017 school year was $33,480 at private colleges, $9,650 for state residents at public universities, and $24,930 for out-of-state residents attending public universities.

Average American University Fees

University type Average Fees (per annum)
Public university: in-state rate

(not available to international students)

$9,650
Public university: out-of-state rate

(applies to international students)

$24,930
Private college

(applies to all students, including international)

$33,480

(Source: US College Board)

Fees for international students at public universities in the U.S. are generally the same as the out-of-state fees, so international students are looking at around $25,000 per year.

Most undergraduate programs are for four years, so that takes fees up to $100,000. Of course, this amount only covers tuition. The total cost including living expenses is likely to be more than double that, taking the cost for an international student to study overseas to over $200,000.

In today’s terms, that’s a cost of around R2.7m per child. Factor in further currency depreciation in the next few years, and that number could get even larger. For many of us, saving up this kind of cash on a local salary is not a feasible option.

Even for those who can afford it, there may still be challenges in getting a place at an overseas university and obtaining the necessary student visa. Most U.S. universities limit their international student populations to less than 20% of the student body. What this means is that students who are U.S. residents or green card holders typically experience significantly higher acceptance rates.

American University Acceptance Rates

University U.S. Residents/Green Card Holders International Students
MIT 9.4% 0.03%
Stanford 4.7% 1.1%
Berkeley 21.3% 8.2%
Illinois 70-80% 6%

(Information compiled by LCR Capital)

LCR Capital facilitates EB-5 investment visas to the U.S., whereby foreign students who have obtained a green card via the EB-5 visa program are treated as permanent U.S. residents. This means they qualify for the significantly lower in-state tuition fees at public universities in the state where they reside, as well as benefit from the higher acceptance rates of domestic applicants.

“Uncertainty over the future of South African universities is a major reason why many families are looking to emigrate,” says Douglas van der Merwe, of LCR Capital.

Families can obtain the EB-5 visa by investing $500,000 into suitable U.S. based projects for a period of approximately five years. Under the program, investors can qualify to obtain a green card for themselves and all immediate family members up to the age of twenty one.

“South Africans can get a temporary U.S. green card within 18-20 months and a permanent green card two to three years later,” says van der Merwe.

“Access to better education prospects for your children is one of the most appealing aspects of the EB-5 programme. But there are other benefits too. Investors can move to America, buy property, and set up businesses,” says van der Merwe.

Investor event

LCR Capital are returning to South Africa for the third time this year, to host information seminars about the program.

To attend a seminar in Cape Town or Johannesburg, register online.

The seminar will focus on:

  • Securing a green card for you and your immediate family
  • What the EB-5 visa programme is and how it works
  • Dual citizenship vs relocation to America  
  • Investment opportunity overview
  • Application process and approval timelines
  • Audience Q&A session

Speakers

Marc J. Sharpe, Managing Director at LCR Capital Partners

Gavin Colaco, Fragomon Worldwide

Cape Town (Table Bay Hotel)

27 June: 10:00am – 11:30pm

Johannesburg (Four Seasons Westcliff Hotel)

29 June: 10:00am – 11:30pm

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