Cost-Benefit of Overseas Education

Many parents today save up a lot of money for their children to pursue an overseas education. More than a few would have asked, is it all worth it? Well, someone actually did a fairly detailed cost-benefit analysis on the issue using a simple financial model (with assumptions of course). Check out Ahmad Ismail's analysis on the issue here.

Basically, the conclusion appears to be that "there is nearly no economic benefit to sending children abroad as opposed to sending them to local universities". Unfortunately, I haven't the time this 2 days to do a rigourous study of overseas education and its cost and benefits, I'll give my 2-sen on my personal views with regards to the issue.

The most significant global phenomenon of tertiary education for the past decade or so, has been the "democratisation" of degree-level education. That is sort of a polite way of saying "everybody also can get a degree from somewhere or other". We have argued that the focus on the quantity of universities and university graduates has reduced the quality of degree level education in Malaysia. However, it is not a phenomenon unique to Malaysia.

To varying degrees (pardon the pun ;)), it is the same for Australia, United Kingdom and the United States. The global result is hence the overall decline in the average quality of degree graduates. For example, a student who would possibly have qualified only for a diploma in the past, would have no problems securing a degree certification today.

Viewed from the above context (which is different from the approach taken by Ahmad), the argument that an overseas education may not be economically more beneficial than a local university holds a certain level of merit. My experience in recruitment has certainly taught me that local graduates are not uniformly weaker than foreign ones, as often generalised (and I would say, generalised wrongly). There are graduates from foreign universities who I would not hire, even if I'm offered a 3-month free trial, just as I wouldn't some local graduates.

At the same time, there are many local graduates who I would happily hire, and rate equal or better than most "overseas" graduates. Hence, in this regard, my personal experience 'sort of' adds justification to Ahmad's hypothesis.

However, I believe that there are exceptions. The exceptions are when these overseas graduates originates from the top universities overseas. Whether justified or otherwise, the market rates graduates from say, Yale or Cambridge much higher than those from the average (for lack of a better descriptive term), universities. I must admit that I have personally benefited from such treatment having graduated from Oxford. Whether its fair, justifiable or otherwise, my chosen alma mater eased my entry into on of the top global consulting companies and indirectly helped my start up business due to better chances of seeking appointments with key client managers. Even today, in politics, I'm being viewed a little differently, whether I like it or not.

Hence, in all likelihood (it's still a long time yet) for my own daughter, I'll happily (by hook or by crook) send her overseas if she gains entry into some of the top schools in the world, knowing that she will benefit directly or indirectly from such an education. However, if she's say, an average student, local universities or possibly the insitutions down south, may be the preferred choices.

There is however, a caveat to the above argument. The choice between a local public university as opposed to an overseas university also presupposes that the former is an applicable option, particularly for non-bumiputeras. If access to local public universities isn't a reliable option due to uncertainty of entry requirements as well as course allocation, then the students have no choice but to secure their tertiary education either at local private unversities like Multimedia University or via twinned programmes with local private colleges or directly to overseas institutions.