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University fees

One in ten parents will not help pay for their child’s university education rising costs mean parents are rethinking contributions

  • Half of parents have not started saving for child’s university education
  • 1 in 5 parents will work overtime to help with costs and 15% plan to take on second job

New research from HSBC reveals that 10% of parents will not contribute to the cost of their child’s university education following news that fees will treble from next year.

Despite current estimates that suggest students starting university from September 2012 will pay a staggering £48,409* on average for the cost of their degree to cover university fees and living costs, a number of parents are expecting their children to fund these costs themselves if they choose to go to university.

HSBC questioned 1,000 parents with children under the age of 18 about their attitudes towards saving towards the cost of higher education.  The survey found that more than half (52%) of parents with children under the age of 18 have not yet started to save for their child’s university costs.

For those who do plan to contribute, when asked the key ways in which they plan to help to pay for their child’s higher education costs, the majority (54%) said they would simply save more. However, some parents plan to make large sacrifices to help pay for university fees such as cutting back on luxuries (41%), taking on more overtime at work (21%) or seeking a second job (15%).

Top 10 ways parents plan to pay for child’s university education
  1. Saving more (54%)
  2. Cutting back on luxuries (42%)
  3. Advising child to live at home for university (26%)
  4. More overtime at work (21%)
  5. Taking on a second job (15%)
  6. Downsizing their property (8%)
  7. Buying a student buy to let property (7%)
  8. Renting out a room (5%)
  9. Selling a car (5%)
  10. Ask grandparents for help (5%)
Bruno Genovese, Head of UK Savings at HSBC commented:

"The cost of sending a child to university is rising and for many parents this additional expense is not something they had factored in to their spending. For those parents who do plan to help their children pay for this milestone need to start thinking now about how they will do this. It is important that parents start to save for the cost of their child’s university education as early as possible in order to avoid having to take drastic measures further down the line.”

Steep cost of student accommodation adds to family woes

It is not just rising fees that are making parents think twice about paying for university. The average cost of accommodation in student halls is currently £3,807* per year and this added expense is also causing stress for many Mums and Dads.

To help cut the costs of sending their child away to study, a quarter (26%) of parents would ask their child to live at home during their university years to help. Other parents are taking more severe measures; eight per cent are considering downsizing their current property to pay for university living costs, 7% plan to invest in a buy to let property to rent out to other students to cover the cost of their child’s accommodation while a further 5% plan to rent out their child’s room while they are at university for extra income.

Jonathan Moore, director of student accommodation at  adds:

"When the tuition fee hikes kick in next year, students and parents alike will be looking at how they can save money on accommodation costs – one of the biggest financial headaches of a university education. Parents will be reviewing every option to make their children’s university career as financially viable as possible rather than asking them to stay at home and foregoing the whole university experience altogether.

"One way to cut costs is to opt for privately owned accommodation rather than university halls. According to our research, the average student at a Russell Group university can save over 9% on rent by doing this – a saving of almost £1,100 compared to renting university accommodation for three years. The savings are even higher in London where the savings reach almost £2,000 over the course of a degree.”

Regional Findings
  • Parents in the North East are least likely to help fund the cost of university – almost one in five (18%) say they do not plan to contribute to the cost of their child’s higher education at all.
  • Parents in the North East are also least likely to have started saving for the cost of sending a child to university; three quarters (73%) have not yet setting money aside.
  • London parents are most organised for thee future finances needed to send a child to university, two thirds with children under 18 (65%) have already started saving for their child’s higher education.
  • Parents in London are also most likely to do more overtime (32%) and take on a second job (28%) to help pay for university costs.
  • South Western parents are most willing to sacrifice their family homes to pay for their child to go to university – 14% say they will downsize to help fund the costs.