University debts ‘underestimated’
Students are set to graduate with nearly two-thirds more debt than they are expecting, research has shown.
The average would-be student estimates they will rack up just under £8,000 worth of debt during the course of their studies, while parents think their child will end university life nearly £10,000 in the red.
But figures show that students graduating in 2006 had actually run up an average debt of £13,252, the Association of Investment Companies said.
Despite the shortfall, parents and children are being slightly more realistic than last year, when parents thought a student would graduate with debts of £6,849 and teenagers thought they would go just £6,190 into the red.
Just under a third of would-be students said they would live at home while they were at university to save money, and 31% planned to work. But 27% said they would be forced to take out a loan and 21% said they expected their parents to foot the bill.
A quarter of parents expected to have to pay for their child’s time at university, while 36% thought their child should work and 12% said they would have to take out a loan.
Around 93% of parents said they were willing to make significant sacrifices so that their child could go to university.
Six out of 10 parents said they would go without a new car to help them meet the cost, 53% would sacrifice holidays, and 36% would even put off early retirement. But 7% of those questioned said they would not sacrifice anything while their child was studying.
Despite the cost of university, 30% of sixth-formers are still planning to take a gap year, which is likely to set them back by around £4,000.
More than half said they would fund their trip by working their way around the world, 31% said they had saved money for it and 8% said they would finance it through borrowing.