Of the 5,550 parents from 16 countries and territories across the globe – who were surveyed by HSBC into the value of education – more than 70 per cent said they believe university is unaffordable for most people.
When it comes to funding a university education, the report says it is typically parents who provide the money, with a staggering 91 per cent of guardians saying they’ll be planning to contribute to their child’s tuition fees and/or living costs when they start university.
A similarly high figure of 88 per cent said they are already contributing towards costs.
But, despite parents recognising the need to save to help pay for their child’s further education, the report found many do not put this into action.
Among those parents who have not yet saved anything towards the costs, almost 57 per cent said they do not have enough money left to do so after paying daily bills, while 18 per cent said they hadn’t even given it any thought yet.
In order to get parents and guardians thinking about planning ahead for their child’s education in the current financial climate,HSBC has put together its top-five practical tips to help-out:
1) Plan for higher ambitions
More than 14 per cent of parents told HSBC a postgraduate qualification is essential for their children to achieve important goals in their lives.
If this is the case for many other parents out there, the bank is urging people to think about the financial implications of their children staying at university for longer – and to have a plan for meeting these costs.
2) Always ask for advice
55 per cent of parents who sought advice about their children’s university education said they learned about possibilities and options they had never considered, with a further 46 per cent saying they had become aware of barriers and complications they had overlooked.
“Don’t be afraid to seek advice,” says the bank. Make the most of the many resources available to give yourself a better idea of the opportunities and drawbacks involved in making further education-related choices.
3) Allow for those vital extras
13 per cent of guardians said they have paid for additional tutoring for their primary school children, however, 36 per cent said they wouldn’t even consider tutoring because of the cost.
If this is the case, and if parents truly want their child to succeed from the beginning, the bank is urging parents to allocate sufficient money to support their child’s educational development from the earliest stages.
4) Encouraging independence is essential
86 per cent of parents said becoming independent, or learning to become financially responsible (82 per cent), are important benefits of a university education.
In-line with this belief, HSBC found 43 per cent of students currently at university are helping, or planning to help, fund their own studies by means of saving, borrowing, or paid work.
“Becoming financially responsible is an essential step towards adulthood,” says the bank, so start teaching your children how to manage their finances from an early age.
5) Save more, repay quicker
One of the more significant findings showed how parents anticipate money they borrow to fund their child’s university costs will take an average of 8.3 years to repay.
60 per cent of people with a pre-primary school child said they will use savings to cover their future costs, however, only 39 per cent of those with a child currently at university are using, or planning to use, savings.
HSBC recommends that, to minimise the impact of borrowing, parents should start saving as early on as possible – and urges them to not let their savings plans get derailed.