Parents get ready to struggle through university costs
According to the latest study by Association of Investment Companies, the recession coupled with this September’s hike in university tuition fees, parents and students are finding it tougher than ever to keep with the financial obligations of higher education.
Of the parents surveyed, 86% are finding/will be finding it harder to support their children through university, or believe it will be harder in the future, due to the UK’s economic troubles.
36% of the parents think that their children will have to live at home, while 13% of grandparents will be or are contributing towards the costs.
Both parents and grandparents, especially for students in London, expect to and have taken money out of savings to help pay for university costs.
Tuition fees are set to go up to £9,000 this September, with some parents deliberately opting lower charging universities for their children.
Annabel Brodie-Smith, communications director at AIC said: “With the recession and the introduction of tuition fees adding to the financial strain of university expenses, families are clearly looking at ways to save money.”
“It’s not surprising parents are under financial pressure and some are keen for their children to live at home and to attend lower cost universities.”
The financial concerns for students is also clear, as over a half of them expect to leave university with £20,000 of debt, with 14% expecting it over £40,000.
However, the report suggest that in reality the total amount at the end of the student’s university life will be higher.
Push.co.uk, the independent guide to university life suggests the average debt for students starting a UK university in 2012 will be £53,000. It is also estimated that students expect to take up to 20 years or more to pay off their loans.
Brodie-Smith added: “If it’s possible to save for your children over the long-term, you can give them a financial advantage in life. The sooner you start investing for your children, the better chance of greater returns.”
“Investment companies offer parents an efficient way of saving as they can access the long-term potential of the stock market. Investment companies invest in a range of companies on your behalf, spreading your investment risk and they are available from as little as £50 a month, or over £250 lump sum.”
“If you had invested £50 a month in the average investment company over the last 18 years you would now have an impressive £21,647.”
Concerns over the lack of graduate jobs are also fuelling questions of whether university is worth the expense that it racks up, with some students also abandoning or delaying going their postgraduate studies.
This report follows recent surveys highlighting more and more ‘chadults’ appearing in the UK. These ‘chadults’, children over 21 still living with their parents, are on the increase as fewer young adults can fly the nest due to rising costs of living, high personal debts and being priced out of the housing market.