By Daniel Hunter
Parents estimate that the average student graduates with £18,333 worth of debt when the actual figure is £53,000, reveal the findings of a new report.
Students themselves underestimate the level of debt, expecting to graduate £24,436 in the red.
Findings from the Association of Investment Companies (AIC) show that one in three parents expect to use some of their cash savings to help fund university costs, while a further one in ten say they will use all or most of their cash savings.
Some eight out of ten parents say that the tough economic climate is making it tougher to fund their children through university with students’ grandparents stepping in to help, with an average £2,000 per year.
Nine out of ten students expecting to go to university say they won’t be influenced by the level of tuition fees, and while one in six parents expects their children to help finance their time at university by part-time work, only half this number of students plan to do so.
Also, while nearly half of parents expect their children to live at home while studying, only one in five students plan on doing this.
The report adds that as well as being mindful of the cost of university, young people are also acutely aware of the difficulties of getting on the housing ladder.
While nearly half of students would prioritise help with university costs, more than one in three said they would rather have help towards a first property.
Parents are willing to make sacrifices to help fund their children through university. One in four would forgo annual holidays, and one in five a new car, with one in ten even putting off early retirement.
“Whilst parents in particular seem to be underestimating the true cost of university, they are clearly prepared to make very real sacrifices to help fund their children through university, with many using their life savings and in some cases even taking out loans in their own name,” said Annabel Brodie-Smith, communications director of the Association of Investment Companies (AIC).
“Whilst it’s never going to be easy to build up the huge sums of money that a university education can now entail, a little forward planning could definitely remove a good deal of the burden.”
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