SHOCKING NEW STATS SHOW HOW FAMILIES ARE BORROWING MONEY FOR THEIR CHILD’S DEGREE – BUT IS THEIR INVESTMENT WORTHWHILE?
A record number of parents are taking out loans to help their children through university, according to new statistics – and even grandparents are being asked to chip in. The news comes after an overwhelming response from Graduate Fog’s users over the question Do you feel bad taking money from your parents?, which strongly suggests that many of these parents will continue having to support their children long after graduation.
A survey by Cross Country trains – which quizzed 1,500 parents and 500 graduates – found that parents had loaned their children an average £6,568 during their three year course to pay for rent, books, bills and clothing. Two-fifths of parents have borrowed money or used credit cards and overdrafts to help fund their child’s degree. One in ten families have even remortgaged their home – and a further 15% of the 1,500 parents and 500 graduates who took part in the poll have been forced to take out a bank loan. And 10% of parents admitted to asking their child’s grandparents to lend the money.
Over half of the graduates said they would pay their parents back – but 85% of parents said they do not expect that to happen. The study also found that daughters were more likely to borrow money than sons even though they would feel the most guilty.
The survey also revealed the impact that paying for young people’s education is having on family life and lifestyles. Many participants said they had sacrificed on holidays, redecorating and buying a second car in order to gather together the money required for their child time at university.
But Graduate Fog’s users know that many of these parents will continue to support their children financially even AFTER graduation. This website’s Debate topic Do you feel bad taking money from your parents? prompted startling evidence that many of you are still accepting financial support from your parents in some form or another – even those of you who are working full-time and earning a proper salary. You say your jobs are either low-paid or unstable – which makes you unable to go it alone.
Challenging the myth that you are generation of spoilt spongers (thanks), ALL of your comments said that you hate having to accept money from your mum and dad. Not one person said they felt fine about it.
It makes me incredibly angry that the student loans system takes your parents’ income into account. It effectively FORCES adults (and yes, students are adults as they are over 18) to be reliant upon their parents for support. It then sets everyone up for a system where it is considered normal for parents to subsidise their adult children for longer and longer.
“I live with my parents’-in-law… which is effectively ‘taking money’ from them, as although my husband and I pay them rent it is only a nominal amount and I’m sure it doesn’t even cover the cost of our food, extra lighting bills etc. And again I feel horribly guilty… I’m not even their child!… but what else can we do? We earn an okay amount of money between us but neither of us are in jobs with enough stability. We don’t know if we will still be earning an okay amount of money next month, and that is what prevents us moving out.
“I’m lucky enough to be working but don’t earn enough to move away from home, and the cost of my commute prohibits me from saving towards getting out of my overdraft let alone save for a deposit. The more I see my friends in graduate positions moving into their own places and getting on with their lives, the more depressed and trapped I feel. To top things off I’m not even working in the area that I want to build a career in.
“When I hear about older people worrying about buying a house I just want to say to them well I cant even afford to rent! I’m currently in the process of applying for a second job just so that I can save a deposit and to rent in a flat share.”
And Catherine wrote:
“I have to live with my parents even though I am working full time so in a way I am taking money from them. I’m desperate to be financially independent but with the cost of living getting higher each year I’m worried it will never happen.
“Many of my friends who live away from home rely on their parents to send them money every month which just goes straight to the landlord or is used to pay bills. It makes me angry to hear ignorant people moaning about the young being spoilt because they get money from their parents, as though they spend it on designer clothes or something.
“Jobs should pay a living wage and rents should be limited. Then we would not have so many young people who still need pocket money.”
Although the finances of undergraduates and their families are interesting, I think looking at those of graduates and their families is even more illuminating. Current students’ parents are forking out thousands of pounds in the belief that the degree that their child is studying for is a worthwhile investment. But what if it isn’t?
*Will undergraduates’ parents have to keep financing their children post-graduation?
Are you shocked that it’s no longer only students and graduates that are getting into debt to finance their university education, but now parents – and even grandparents – are being required to ‘invest’ in the cost of a young person’s degree?