The Covid-19 outbreak has disrupted many Malaysian students’ plans to study abroad, but it may not extinguish their dreams of pursuing an education overseas.
Eager for the experience of studying abroad, some of those who have received offers from foreign universities are choosing to defer their studies until they can travel safely. Meanwhile, students who are heading to countries that are recovering from the pandemic are following through with their original plans.
In fact, a global survey by IDP Connect in May found that 69% of international students with current offers from universities expect to continue their studies as planned, and only 5% have chosen not to go ahead with their plans.
An article by ICEF Monitor, citing the findings of EY-Parthenon’s global education practice, projects that demand for studies abroad will rebound once the pandemic eases. It also anticipates that countries such as Canada, Australia and New Zealand may see more international enrolments, owing to reopened visa processing services and lifting of travel restrictions on international students.
Malaysian students have always been eager to study abroad. Ministry of Higher Education data shows that in 2019, over 70,000 Malaysian students were studying abroad. Most of them were in the UK and Ireland, followed by Taiwan, Australia, Egypt and Indonesia. Other popular destinations include New Zealand and Japan.
Why do Malaysian students prefer to seek higher education overseas? There are many reasons. For instance, they get to immerse themselves in foreign cultures, network with global peers and study at one of the world’s top universities. According to the Times Higher Education World University Rankings, the top 10 universities are found in the UK and the US.
Overseas degrees are not cheap, though. Parents often have to save up for many years to pay for their children’s tuition fees, living expenses and other costs. They also need to take into consideration fluctuating foreign exchange rates that could affect their savings.
One strategy that financial experts recommend to Malaysian parents who are preparing for their children’s further education is the use of foreign currency products. These include foreign currency accounts and foreign currency unit trusts in Malaysia.
Foreign currency accounts can be useful for Malaysians who work abroad, parents who have children studying overseas and expatriates. Account holders can save in multiple currencies and earn interest on the savings, giving them the flexibility to convert their savings into currencies that are performing well.
These accounts are also useful when parents want to transfer money to their children abroad, as they can save on fund transfer costs by avoiding double conversions. Some banks offer debit cards linked to a foreign currency account, which enables the child to easily access the money.
Meanwhile, foreign currency unit trusts allow investors to diversify their portfolio and provide potential protection against a downturn in any one market. This could be useful for parents who want to grow their savings and hedge against foreign exchange movements of any one currency.
This asset class also gives investors exposure to listed companies and fixed-income products in other countries, which may be experiencing more growth than local asset classes.
Of course, there are risks that come with foreign currency products. Geopolitical events could disrupt markets abroad. This is where diversification is important, financial experts often say, as a wide exposure to various markets and asset classes can offset unexpected movements in potential returns in asset classes elsewhere.
In Malaysia, there are many providers of these solutions, offering a diverse range of products and features. Parents should ensure that they do their research and prepare ahead of time to support their children in achieving their dreams.
You can start planning for your children’s education today with OCBC Bank and find out how you can invest to prepare for your children’s education funds. Visit http://www.ocbc.com.my/lifegoals to begin your journey.
The information in this article has not been reviewed by the Securities Commission Malaysia.
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