Student costs strain the bank of mum and dad

Average debts for students who start university in 2012 are expected to be £53,000 according to independent guide to university life push.co.uk.

Some 16 per cent of students surveyed think it will take over 20 years to pay off this debt and 39 per cent think it will take between 10 and 20 years, according to the latest student debt research by the Association of Investment Companies (AIC).

Parents are even more pessimistic with 20 per cent who expect their child to have university debts believing it will take more than 20 years for their children to pay off the debt with the same percentage of parents as children (39 per cent) thinking it will take 10 to 20 years.

A total of 86 per cent of parents are finding or will find it harder to support their children through university, or they believe it will be harder in the future due to the UK’s economic troubles.

Half of those parents surveyed expect their child to graduate with more than £20,000 of debt and 14 per cent expect their child to graduate with more than £40,000 of debt – still lower than the push.co.uk’s forecast of £53,000.

Parents’ strategies to meet costs include their children living at home with 36 per cent believing that will be the case or grandparents pitching in with 13 per cent, two per cent more than last year, helping out their grandchildren.

Economic difficulties mean parents are urging their offspring to choose a lower-charging university with 19 per cent saying they think their children should choose a cheaper course.

However, students have their own solutions with a quarter choosing vocational qualifications to gain a well-paid job on graduation.

More than 25 per cent of parents would like their children to delay going to university for a year with 14 per cent suggesting financial reasons for this decision and 11 per cent believing their child would benefit from work experience.

AIC communications director Annabel Brodie-Smith advises parents to plan ahead to give their children an advantage in life.

“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,” she said.

“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. If it’s possible to save for your children over the long-term, you can give them a financial advantage in life.

“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.”

It is not surprising that some teeangers are considering whether being saddled with so much debt is worthwhile.

Some 67 per cent of students are worried about their job prospects due to the current state of the UK economy, which is up two per cent on last year and eight per cent up on 2010. More than a quarter of parents (28 per cent) think their children should reconsider whether university is the best option for them.

Some 30 per cent of students say their university debt will influence their career choice and they will target better paid jobs to pay off debt – especially in the North (35 per cent) and Midlands (36 per cent). More than half parents think their children will be funded through loans, with 14 per cent of parents believing they will be the primary source and 12 per cent expect to part-time work to pay for part of the costs.