Bank of Mum and Dad footing the bill for higher education
A third of students would rather ask their parents for money rather than forego night out, a new study has revealed.
University can be an extremely expensive time for both parents and students. Accommodation, travel and utility bills all add up meaning it is essential for students to keep control of their finances.
A new study of 500 UK undergraduates conducted on behalf of Nationwide by Vital Statistics was launched to find out if students are aware how to budget before they begin living independently at university. Almost seven in ten (69%) said they were taught insufficiently about finance and were ill prepared for student life, with nearly a third (30%) saying they taught themselves everything they know about how to manage money.
Students polled also admitted that the lack of knowledge around budgeting didn’t stop them being frivolous with their student loan. 29 per cent said that they spend it all within a few months of receiving it, and just over one in ten (11%) confessed to spending it in the first month. Just a few of the things students admitted to splashing their loan on included;
- Nights out (67%)
- Nice clothes (66%)
- Holidays (30%)
- A car (8%)
However it isn’t the students who are bearing the brunt of frivolous spending, it is their parents. A further study, also by Nationwide Flex Student, of over 600 parents of past and current students revealed that two thirds (68%) make up the shortfall themselves, leaving them living a life of austerity and cutting back their standard of living to pay for their children to get a university education.
Parents are finding themselves stuck on a strict budget once they send their child to university, with many fun outgoings being cut. The cuts to their lifestyle mean savings (34%) and holidays (29%) take a hit – not only this socialising (25%) is impacted and treats such as a new car (22%) and even fun expenditures (22%) are all affected.
Some parents are even forced to take more extreme measures. Almost one in six respondents (15%) borrow money or get in to debt, and one in seven (14%) take a second job or delay early retirement (14%). But with parents estimating the bill for university to be in the region of £2,500 per year, totalling £7,500 for a three year course per child, it’s perhaps not surprising that cutting basic outgoings is essential.