Graduate debt ‘could last for 20 years’

Many graduates could be paying back debts incurred through student life for 20 years, a survey of parents has found.

The poll by AIC foun…

Many graduates could be paying back debts incurred through student life for 20 years, a survey of parents has found.

The poll by AIC found 86 per cent of mums and dads are struggling to provide support to their children at university in the current economic climate.

In 13 per cent of cases, grandparents are helping out with extra funds, up from11 per cent last year, but most may find they need other solutions. One of these would be for children to save rent costs by living at home, an option 36 per cent of parents think their children will take, or choosing a lower-charging university, something 19 per cent advocate.

Many are gloomy about the debt prospects graduates will face, with a fifth of parents of a child in higher education expecting it will take 20 years to pay off the debt, while 54 per cent of students expect to owe £20,000 when they finish their course.

This latter figure compares with 49 per cent last year and 14 per cent of students believe they will owe as much as £40,000.

Communications director at the Association of Investment Companies Annabel Brodie-Smith said: "With the recession and the introduction of tuition fees adding to the financial strain of university expenses, families are clearly looking at ways to save money."

Meeting such costs may be particularly hard for parents with debts of their own to meet as well and those who owe money and have children who could be going to university in the years ahead may benefit from a debt management plan to get their finances under control by then.

A study published by the Co-operative Group earlier this month revealed that 15 per cent of parents with dependent children also have to financially support their own mothers and fathers, which could add particular strain to those with youngsters at university.

Posted by Paul Thacker
 

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