UNIVERSITY EDUCATION COSTS

Does the prospect of helping your children with the costs of university cause you concern? Do you have a good handle on the overall costs?

Well here is some information to help you:

The National Union of Students in their press pack for 2005/6 estimated average expenditure of students in England and Wales outside London was £8,810 and this includes the current tuition fee of £1,175. At 2.5% inflation this gives the cost of a three year course currently of £27,086. If you have just been blessed with a baby this cost might rise to £42,111 in 18 years time, assuming 2.5 per annum inflation.

These figures make no allowance for the new Top up fees. From September 2006, universities in England and Northern Ireland now charge tuition fees of up to £3,000 per year to new students who begin their studies from that year. Most universities are charging the full £3,000. The maximum rate will rise in line with inflation each year, but the Government has promised not to increase it by more than this amount until at least 2010.

Hence these costs will be even higher in the future and the bill for university education could become very onerous indeed.

There are various ways to tackle all this.

The first is that the onus is on your child to take maximum loans – but this risks them starting out in life with huge debts. According to the 2006 Nat West Student Money Matters survey graduates now leave Universities with an average of £13,252 of debt, up by £612 on 2005. The survey estimates average debt levels of £14,779 by the time they leave higher education in 2009, and much of the increase is down to the increase in tuition fees.

The second way to tackle this is to help them, but how? An NOP survey, from August 2003, showed that up to 41% of Londoners were willing to remortgage their homes to help their children. Elsewhere a lower but still strong percentage said they would too. The case study we have here gives you such an example and how we helped the parents involved.

Others invest capital while children are young to build up a university education fund for them, essentially adding to the Government’s annual children’s allowance. Such parents are very wise to fund in advance for the rising burden of university education costs. It surely will become more expensive over time now that the tuition fee genie is out of the bottle. With our help we can guide you to the funding solutions that suit you best.

If you would like help on how best to invest while your children are young to plan for future school fees or university education costs, or if you wish to remortgage to create capital that is needed now, do contact us, or go to the Enquiry Form.