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Students expect to rack up debts of over £20,000

Students expect to rack up debts of over £20,000

Category: Savings

Updated: 12/08/2009
First Published: 12/08/2009

MONEYFACTS ARCHIVE
This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.

Against the backdrop of an impending new university year, one in four students says they expect to rack up debts of over £20,000 by the time they graduate.

With A level results to be published in just over a week, thousands of students are currently on tenterhooks to see whether they have achieved the necessary grades to get on their chosen course.

However, the Government's recent announcement that student grants and loans will be frozen next year, while tuition fees will increase, means finding the finances for university life will prove tougher than ever before.

With much of the cost directed to the bank of mum and dad, 74 per cent of parents believe the recession has increased the strain of university costs, a survey by the Association of Investment Companies (AIC) has found.

Students will look further up the family tree for financial help, with 12 per cent of grandparents expected to contribute to university costs.

The pressure of paying off large debts upon graduation is reflected by the three in ten students set to begin their university course who say they would favour a higher paid job over their vocation after they complete their studies.

Many students think their degree will not just boost their chances of a much sought after job, but also to mean long term debt, with 42 per cent expecting their repayments to take over a decade to pay back.

There are a number of student accounts available from lenders that offer students much needed breathing space at university, with interest free overdrafts of up to £3,000 available from year one.

"Clearly the recession is making it harder for today's parents to help their children's university education and so it is important to plan ahead," said Annabel Brodie-Smith, communications director of the AIC.

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