New figures on the cost of an education

With A Level results out tomorrow (19 August 2010), the Association of Investment Companies (AIC) annual survey suggests that students starting university can expect debts of almost £25,000 by the time they graduate.

With the government contemplating reducing funding for universities, the financial strain on students is likely to increase and the average student starting university in 2010 is expected to graduate with £24,702 of debt.

A long term debt sentence

Once again this year, students are proving more realistic than their parents when it comes to paying off their university debt with 34% of students predicting they will graduate with over £20,000 of debt compared to 19% of parents.

49% of students estimate that it will take them over 10 years to pay off their debt and 8% believe they could be in debt for over 20 years.  With such a debt sentence upon them, some 18% of students said that they would put off or postpone doing postgraduate studies due to the extra debt entailed.

The worry of unemployment

55% of students are worried that they will not be able to find a job on graduation, due to the effects of the recession.  With the worry of debt levels on graduation, some 32% of students have said that they would prioritise a higher paid job over their career vocation to help pay off their student debt and, of the 27% of graduates who would consider taking a gap year before university, 11% would do so in order to help their financial situation on graduation and 9% would do so to put less of the strain on family finances.

Parental sacrifice

Parents are still prepared to make financial sacrifices for their children to help them through university.  23% of parents questioned said they would sacrifice their annual holiday, 21% a new car, 13% home improvements or extensions, 13% early retirement and 12% moving to a bigger house.

But is it worth it?

Meanwhile, new research from YouGov reveals that over half (52%) of British adults think that too many young people are studying at university.

Younger generations are more likely to think that more students should be granted a place at university, with only 44% of 18-29 year olds saying that too many people are studying at university compared to 61% of those British adults over 60 years old.

This year, 160,000 school leavers are likely to miss out on a place at university.

Comments

  1. I try not to think about my student loan, and I graduated my first degree in 2005…can’t imagine what new graduates must be feeling with a £20,000 millstone around their neck.

    I’m not sure who all these generous parents are either! If I had suggested my mum and dad give up their holiday for my university fees, they would have laughed all the way to the airport. I had my student loan and part time jobs instead! And when I chose to go back to university for my MA, I worked and saved for another two years.

    This has been discussed before, but sadly, education isn’t cheap, we pay a fraction of the actual cost of our heavily subsidised degrees. Going to university isn’t a ‘right’, it’s an choice, and one I wholeheartedly agree with. What sticks in the throat is the current crop of politicians who went to university with no tuition fees and maintenance grants slowly increasing costs all the time!

    I think the issue about getting a job after university is more pressing at this point; it’s one thing to have debts, and quite another to have the means to repay it.

    m_allison

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