Article published 12th February 2013
£27,000 in fees, plus accommodation, living and travel costs.
With such eye-watering headline costs, how can teenagers in England afford a university education? 2012 saw the first intake of undergraduates faced with tuition fees of up to £9,000 per year in England. Despite reassurances from government the knock-on effect is self-evident with applications down 6.6%. Should your child consider going to university, can they afford to go and perhaps even more importantly, can they afford not to go?
Guest writer, Owen Burek founder of Save the Student and co-author of - The Essential Student Guide to Finance - explains all and we tell you how to access your FREE guide.
Newspaper headlines scream about the sky-high costs of university and the cost, of obtaining a university degree, is rising year on year. Many school and college students, who have worked hard to achieve a place at university are now faced with the tough decision of whether university (with an average £43,500 price tag) is worth it. Yes fees are considerable and debt alarming but this very scary amount of debt is actually different to any other kind of debt we are usually warned about, with repayment firmly rooted in ability to pay.
Untangling the myths - understanding the new student finance system to pay for university
No money is paid upfront. A common worry for young people, especially from lower and middle income backgrounds, is that they simply won’t be able to attend university because their family doesn’t have the money to afford the high fees.
The truth is, no money will have to be paid up front for a university education, or even for basic living costs (covered for many by a maintenance loan). In fact not a penny has to be repaid by any student until they have graduated and have a well paid job. Irrelevant of their financial position, most students can obtain a loan from the Student Loans Company.
The funding is out there
As a condition of the new higher fees system, both the government and UK universities have increased the amount of financial support for students from lower income families (classed as those where family income is less than £42,611 pa).
This relief comes in the form of, any or all of:
- fee waivers
- emergency funds
Eligibility depends on individual circumstances
It’s a ‘good’ kind of debt.
Okay so it's not as good as being debt free but the truth is that a student loan is special. You start repaying on a sliding scale proportionate to what you earn. Graduates have to pay back 9% of anything they earn over £21,000 a year (up from £15,000) and any remaining debt will be wiped off after 30 years.
The good news - In comparison to the old fees system you will actually be paying back less each month.
The bad news - the level of debt has risen and it will take longer to pay back.
Is a degree really worth it?
Graduates are paid more.
According to David Willets, graduates in the UK will earn, on average, £100,000 more than non-graduates over their lifetime. Some might also argue that you can’t put a price on education, regardless of job prospects.
Now more than ever it’s down to students to make the decision whether university is worth it for them and whether their chosen course will aid their development and career goals.
University teaches financial independence
Of course it's not just about financial rewards - a degree may be a passport to higher earnings but a degree and student life have wider benefits too.
It’s important to remember there are countless benefits of leaving home for higher education. Yes a degree comes at a cost but for many students the years that they spend at university are priceless. Attending university goes beyond education, it is a life experience which allows young adults to mature without relying on their parents.
One of the biggest lessons learned is appreciating the value of money (and a lack of it). Budgeting and saving are skills rarely taught in schools so it’s either up to parents to pass on their wisdom or for young adults to learn by doing.
The student money advice site ' Save the Student' has addressed this issue by putting together a free guide to help students improve their finances, and ultimately reduce the amount of debt they are expected to end up with. As well as plenty of practical advice, the book contains 50 of the best student money saving tips.
Leaving the education system with a large amount of student debt is daunting, but it’s important to remember that it is still very affordable. Many of us look back on our university years as some of the best times of our lives, and this opportunity should not be withheld from future generations of young adults based on misconceptions alone.
Owen Burek started Save the Student in 2007 as a first year at the University of Manchester. Initially a blog - sharing his personal experiences and struggles with student finance and budgeting – it wasn't long before the site grew. Post finals he took the plunge and ran 'Save the Student' full time. It is now the leading student money advice website.