Tuesday 27 September 2016

Most parents borrow to pay for children's college education

Published 18/08/2016 | 02:30

Six out of 10 parents say they will get into debt to fund third-level education (Stock image)
Six out of 10 parents say they will get into debt to fund third-level education (Stock image)

Most parents will get into debt to fund their children's third-level education.

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The start of the new academic year is set to be a stressful time for parents and their children - and also an extremely expensive one.

Parents are being forced to borrow as a result of the average €450 a month per child cost of third-level education, according to a survey commissioned by the Irish League of Credit Unions.

Around 58,500 students got their Leaving Cert results yesterday, with most expected to take up a course at third-level.

Six out of 10 parents say they will get into debt to fund third-level education.

And some will resort to moneylenders so they can afford the expenses associated with college courses.

Most parents will struggle to cover the cost of their child's time in college.

Some 87pc of parents are set to financially support their children.

However, there has been a slight fall in the amount of debt being racked up by parents - who are set to borrow €4,600 this year, down €370 from last year, according to the survey, carried out by iReach.

And finding accommodation is also likely to be a big worry, with 67pc of students concerned that they will not be able to find somewhere to live for the academic year.

Students living outside the home are due to spend €1,048 a month - twice as much as those who live at home.

Those living at home are set to spend €530 a month, the credit union-commissioned survey found.

And 65pc of students plan to live at home, an increase on last year. The rise in the numbers living at home is due to the high cost of renting.

Almost seven out of 10 students are set to work throughout the academic year to fund third-level education, working an average of 17 hours a week.

Key findings of the new survey include:

* 60pc of parents get into debt to cover college costs.

* Rent is set to average €376 a month this year, down slightly from last year.

* Parents save for eight years on average to cover the cost of college.

* Six out of 10 family budgets are affected by the €3,000 cost of the registration fee.

Parents say they save for eight years on average to fund the cost of college, but one in 10 will have to resort to using a moneylender.

The average amount being saved is just over €8,000.

Getting a job after college is the biggest concern for parents.

Passing exams ranks second, followed by fears about the misuse of drink or drugs by their student children.

For those students funding their college education, paid employment is the most common method used.

Existing savings are the next most popular way in which students pay for their college experience.

This is followed by the grant, money from parents and a credit union loan.

Only 33pc of students have received or been offered advice on payment plans by their educational provider to help meet costs.

Sinead Butler from the Irish League of Credit Unions said that the cost of third-level education can be a significant burden.

"Families are already struggling with the wider impact of austerity and paying for college has become increasingly challenging for many," she said.

Ms Butler said the research shows that 73pc of parents struggle with the cost of third-level education.

"While parents are saving hard to cover this cost for their children, eight years on average, saving approximately €8,150, approximately 60pc are still getting into debt of an average €4,300 per child," she said.

She said credit unions offer loans at fair rates, with flexibility to meet members' needs.

Irish Independent

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