Even after graduation, many parents are now faced with having to continue to financially support their children. The fee system for paying for university costs was first introduced in 1998 and since then, they have radically increased making the cost for gaining higher education hugely expensive and unobtainable for many. The latest rise in fees came in 2012, which has led to the average amount of debt students have after graduating to increase from $25,000 to $44,000.
In an attempt to assess the nationwide problem, Fidelity Investment conducted a survey which you will find at http://www.fidelity.co.uk to find out how many parents have found themselves in this situation and the results are worrying. Almost 10% of those who took part in the research admitted to paying out more than $5,000 to help their child through university and the average is just over $1,000. This is creating many problems for parents later in life, who hadn’t planned to continue to bankroll their children for so many years. They are having to change their lifestyles and make cut backs in order to help their children through university and 4% of those questioned said they had to remortgage their home in order to cover the unforeseen costs.
The new tuition fee system proposed by George Osborne will likely see the cost of obtaining a university qualification rise even higher. This will have a knock-on effect on graduates as well as their parents and with a 40% drop in the amount of people applying for a place at university; it begs the question about how many more would-be-students will be unable to attend university after the new fee system is employed.
Interestingly, the survey showed that the reason why parents are willing to financially help their children is that they believe it is their parental duty to do so, regardless of their age, with 65% claiming that they do so because they love their children. Almost 13% of parents who took part in the research said they would have to delay their retirement as a result of taking care of their adult children for longer than they originally planned and 48% claimed that their savings are notably less than they intended.
With the proposed new changes from the Chancellor of the Exchequer, the cost of putting your children through university looks set to rise again. With currently 21% of 25 to 29-year-olds currently relying on their parents for money during and after graduation, it’s worrying to think this figure will likely increase in the coming years.
I have about 6 years until my daughter goes to university and I am already stressing. I have an education savings plan but the prices keep going up. I know it is cheaper in Canada than the U.S. but my daughter has dual Canadian-French citizenship and schools are even cheaper in France. Although I hate the idea of her going that far she could get an excellent degree that I could afford. Trying to be creative and still get her educated. Thanks for the article.
Do they have AP classes in Canada ? ( Advanced Placement) ?………. They are a god send. Truely. Can help you save a TON of money. AP classes are offered at the high school in my town. They are college level courses. At the end of the school year, students take an exam. If they score high enough , most colleges will count that test score as college credit. If you are in the US, the cost of the test is subsidized for students that qualify for Free Lunch / Food Stamps. This year the cost of the test is $10 for subsidized and $110 for regualar. A great deal either way. My oldest took several of the tests. It is not unusual for kids to get an entire year of college credit from these tests ! Spend $500 on tests and save $5K on tuition. With being free lunch / subsidized I spent about $100 on all of my sons tests. ( He has always done well on timed tests) He has earned $10,000 in college credit !!!! He went from being a Freshman to being a Sophmore. For kids that are good students ( i.e. this would not have worked as well for mom) this is a much better deal then a part time minimum wage job. ~ Christie
My oldest is ten and a half so I have a little time before she is ready for college, but the way things are going I wonder if anyone will be able to afford an education in the future. I have a nephew with $75,000 in student loans and he can’t get a full-time job. It’s really sad but as a parent I understand why people sacrifice their retirement for their kids. We’re so used to looking after them and making sacrifices for them that we never learn to let them go and fight for themselves.
Hi Alexa,
I have been reading your blog for awhile now, and really enjoy it.
I’m confused though – this is the second or third article I’ve seen here that says it was written by you, but seems quite obviously to have been written by someone in the UK. (another one was about nannies/child care). I thought you lived in Ohio? I’m always wanting to learn more from you about how to get ahead financially, but the UK and Europe have VERY different policies and programs in place, including in child care, family leave, health care, college, and retirement. I don’t feel like it really applies to US residents, since we have such different challenges here. Was this a guest post?
Financial aid and grants are an excellent form of assistance. However dependent students may find it difficult to acquire grants due to their parent’s income. Therefore, it is imperative to invest wisely. It is important to arm yourself with as much information as possible.