Why clients might benefit by sending their children overseas for college

After creating a spreadsheet to compare how much it would cost to send their oldest child to college at each of the five schools she was considering, Kim and Chris Andersen were shocked to find that the school 3,600 miles away was the cheapest.

Thanks to its financial aid offer, attending The American University of Paris and living in an apartment there would cost even a bit less than sending their 18-year-old to the Albany branch of the State University of New York — less than an hour away.

“We wouldn’t send her overseas for school just based on cost, but we also believe the experience of living abroad will enrich the education she gets,” Ms. Andersen said.

More and more families are sending their college students to institutions outside of the United States to combat American tuition costs that have jumped 25% in the past decade and led to an explosion in student loan debt.

The majority of students earning degrees outside of the U.S. are doing so at schools in Europe and Asia.

Of the more than 46,500 U.S. students who are pursuing degrees abroad, about 84% are enrolled in bachelor’s or master’s programs and 16% are pursuing doctoral degrees, according to the Institute of International Education.

(More: 10 popular foreign universities for U.S. students)

The United Kingdom attracts the most American students seeking degrees outside of the U.S., with about 36% of the total, while Canada attracts 20% and about 10% of students studying outside America head to France.

‘A BLIND SPOT’

Brock Jolly, managing director of The College Funding Coach, said he’s seen several families send their children to schools in Canada, but given the cost savings to be had, even more should probably consider it.

“I think there is still such a focus on the traditional path for college that it’s a blind spot for many families,” he said. “Generally, we see it if a family has some sort of international tie, such as one family I have worked with where the mother is originally from France.”

Regardless of whether one has international connections or not, the school still needs to be the right fit for the student. Otherwise, any cost savings could be blown if the child drops out, transfers or takes longer to graduate than expected, Mr. Jolly said.

The tuition savings overall can be significant overseas because outside of the U.S., institutions of higher education are mostly publicly funded. Average tuition in many European countries for foreign students is under $1,000 a year, according to StudyPortals.

By comparison, annual tuition and fees for a private nonprofit four-year college in the U.S. last year averaged $32,410, according to the College Board. For the average public school, in-state residents paid $9,410 per year and out-of-state residents paid $23,890 to attend the same state school.

Germany and Finland are two countries with good programs at zero or close to no tuition, and programs are taught in English, according to Chris Chen, a financial adviser with Insight Financial Strategies.

“There are excellent programs out of the U.S. for little money,” he said. “They are opportunities to get excellent low-cost education at a discount in addition to the culture-immersion experience.”

FOR MATURE STUDENTS

Melissa Brennan, manager of financial planning at Vogel Financial Advisors in Richardson, Texas, is most familiar with the University of London system, where a bachelor’s degree typically takes three years because there is no core curriculum to cover.

Tuition varies, but it may be about $20,000 a year at today’s exchange rates, and adding housing and other expenses would likely bring the bill to about $30,000 a year — but for only three years. The total would be comparable to attending a public school in Texas for four years, she said.

Several advisers warned that it’s important that students be mature before their parents ship them off, because parental help, if needed, will be farther away.

Some advisers think the concerns outweigh the tuition breaks.

Ken Mahoney, CEO of Mahoney Asset Management, said there are three things he worries most about when families consider sending their students to college overseas.

The first is that prospective employers won’t know much about the school the child’s degree is from, and they may shy away from hiring someone whose educational background is unfamiliar to them.

“Will employers look down on a foreign degree?” he said.

Mr. Mahoney also pointed out that the cheaper price tag could soar if the U.S. dollar weakens during the period the student is at school.

Finally, he worries that if an unforeseen medical or health issue occurs, the quality of care may be less than what Americans are used to receiving from their private health insurance.

Mr. Mahoney likes the cultural experience that a semester abroad offers a student, but he believes four years is too much, given his other concerns.

After helping with her daughter’s move overseas late last month, Ms. Andersen said the costs of traveling to get her set up at school were obviously greater than if mom and dad had driven 30 miles south instead of spending seven days in Paris.

She’s also expecting plane tickets for her daughter to travel back and forth to be more expensive than most domestic flights. However, she knows there will be fewer trips than if her daughter were attending a school in the states.

“She won’t be coming home for all the U.S. holidays because she won’t have off school those days anyway,” Ms. Andersen said. “We are really happy she chose a school in France, although leaving her with an apartment and no meal plan — it does feel like she’s been thrust into adult life without the typical college experience.”