Over the last 12 months, schools throughout the world have had to close their doors in an attempt to reduce the spread of Covid-19. These closures, which have been described as a “generational catastrophe” by the UN Secretary General, have meant international schools have had to adapt to teaching remotely, but this has not been the only impact. In this blog post we will look at how Covid-19 has impacted international school fees as well as the long-term impact it has had upon the market.
According to Insights for Education, since the start of the pandemic, 98% of countries have implemented full or partial school closures due to Covid-19. The duration of these school closures has varied enormously from country to country. Some schools have only been closed for a couple of weeks whereas others have been closed for most of the year. A good example of the stark contrast in approaches is to look at Taiwan and El Salvador. In Taiwan schools never officially closed whereas in El Salvador schools have now been closed for a total of 275 days.
The different approaches that countries have taken with regards to school closures have been linked to infection rates but there is also data to suggest they could be linked to income levels. Insights for Education found that low- and middle-income countries have experienced greater disruption to their education than high income countries – in nations with higher average income, schools have been fully closed for an average of 78 days in comparison to 113 days in lower-income nations.
This is related to a number of issues in low-income countries, such as the fact that a higher proportion of households include both children and elderly people, the difficulties involving testing for Covid-19 and enforcing social distancing in schools, and the importance of maintaining the livelihoods of adults to prevent further poverty. This goes to show that the impact of Covid-19 on international schools has not been universal but rather has varied from country to country.
Frozen tuition fees
Results from our Education Survey show an increase in the number of international schools deciding to freeze their tuition fees in comparison to previous years. For example, in Hong Kong where schools have been closed for more than five months since the start of the pandemic, 75% of schools decided to freeze their 2020/21 tuition fees, in comparison to 8% in 2019.
With more schools freezing tuition fees, average school fees only rose by 1%, compared to 3% the year before. In fact, the percentage of countries where average school fees remained the same or decreased more than doubled between 2019 and 2020. In our 2019 Education Survey 18% of average school fees remained the same or decreased, in comparison to 37% this year.
The extent to which international school fees have been impacted by Covid-19 has varied considerably depending on the location. For example, countries that have a large local demand for international schools have generally seen more increases in their fees. This is because they have been less impacted by the fall in expatriate demand caused by repatriations and new assignments being unable to go ahead. This can be seen if we compare the average fee increase in Asia, which has the greatest local demand per region, to Africa, which has one of the lowest. Average fees increased by 2% in Asia but remained unchanged in Africa. Fees have also generally increased more in countries where schools have been less disrupted by the pandemic. The earlier example of Taiwan and El Salvador is a good showcase of this; average fees increased by 4% in Taiwan but were unchanged in El Salvador.
Considering the fact that most international schools have had to close for large parts of the year it is no real surprise that we have seen more frozen fees and smaller increases in tuition fees compared to recent years. In fact, in many countries there have even been calls for tuition fee refunds from parents who state that their children have not received the level of education paid for. In most cases this has not transpired with schools arguing that teachers’ salaries and rent still have to be paid. However, there have been some exceptions. For example, the English School Foundation, which runs 22 international schools in Hong Kong, provided a 45% discount on their June 2020 fees.
Given school closures, decreased demand from expatriates and the fact that many families face economic troubles and reduced disposable income, many people may be surprised that tuition fees have increased at all. This shows that there is still a large demand for international schools.
We do not know yet what long-term impact Covid-19 will have on demand for international schools, but early signs show that they have fared better than expected. Many parents have been impressed by the well-structured, creative standards of distance learning that international schools have been able to deliver. These have generally been of a higher standard than at national schools, which has made parents view them as more dependable. In addition, as a result of Covid-19, many families, particularly in China, have decided against sending their children to oversees boarding schools, choosing instead to keep them close to home at local international schools, adding to the already burgeoning local market.
Having said that, our recent Managing Mobility Survey showed that unaccompanied assignments are becoming increasingly common – on average 43% of long-term assignees are now not accompanied by their partner and/or dependent children, in comparison to 31% in 2016. If this trend continues, international schools will have to adapt to the loss in demand from expatriates and may have to focus their attention on the local market instead. The result of this could be more affordable international schools in the long-term as the market competes for demand from local families looking for good quality but reasonably priced education options.
This will come as a relief to the 48% of companies that reported in our Global Mobility and Covid-19 Survey that they already had, or were expecting to, cut global mobility costs due to the pandemic. International school fees can make up a large chunk of a remuneration package, as shown by the fact that our global average annual tuition fee (in US dollar terms) across all ages for the 2020/21 academic year is a considerable USD 17 001! This is an increase of 3.6% compared to last year, which is mainly due to the drop in value of the US dollar relative to other currencies. This means that, even though tuition fees may not have increased much in the local currency, companies paying for them from abroad may see larger increases.
As illustrated, the impact that Covid-19 has had on international schools has varied considerably from country to country. There is little doubt that international schools around the world will face a vast contrast in fortunes, which will be reflected in their school fees. Some will see student numbers increase while others will have to cope with a fall. As ever, we will continue to monitor the situation and will next be updating our Education Reports in April where we will look to see how Covid-19 has impacted school fees in Southern Hemisphere countries.
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ECA’s Education Reports contain listings of tuition and other fees for international schools in 167 countries, so you can budget fully for this important assignee benefit. ECA conducted research on over 2 800 schools around the world during 2020/2021 to bring ECA subscribers the latest figures.
Our detailed and extensive benefits data is also available to use pre-loaded in our assignment cost projections, which can be purchased on demand or through our Assignment Management System, ECAEnterprise.