Parents ‘underestimating’ student debt levels

Parents across the country are underestimating the levels of debt their children are likely to take on if they study at university, according to a new report.

Data compiled by the Association of Investment Companies (AIC) have shown that on average parents believe that their son or daughter would be around £9,681 in the red when they graduated but the typical figure is almost £13,000.

And the debt management position of newly graduated Britons could be set to worsen further because three-quarters of parents feel that the credit crunch has made it more difficult for them to help their children financially while they study.

Annabel Brodie-Smith, AIC communications director, said: “It’s alarming that few of tomorrow’s graduates or their families really comprehend the financial implications of top-up fees and both have underestimated the amount of student debt they will face on graduation.”

The struggle to become debt free is now understood as a normal part of being young adult in the UK, a report from the charity group Rainer suggested earlier this year.

By Giles Stevenson