Wednesday, August 26, 2009
With A level results looming, the Association of Investment Companies (AIC) recently released annual survey results on attitude towards student debt. In their survey, it was found that 24 per cent of students anticipate graduating with more than £20,000 of debt.
42 percent of students think it will take them more than 10 years to repay debt incurred whilst studying. When it comes to career, 30 percent of those surveyed would opt for a higher paid job over their vocation. Parents of students say that the recession has upped the financial strain of university, this is according to 74 percent and 12 percent of Grandparents are contributing to university costs.
According to the Association of Investment Companies (AIC), recent news that student grants and loans are to be frozen next year, along with increased tuition fees, could have an impact on funding university.
Annabel Brodie-Smith, Communications Director, Association of Investment Companies (AIC) said: "In this economic climate it is extremely important that students and parents understand the true levels of debt they will face on graduation. Clearly the recession is making it harder for today's parents to help fund their children's university education and so it is important to plan ahead. Many young people go to university to enjoy the best years of their life but on graduation find themselves struggling to repay their debts for years.
"Of course parents of students are facing an increasing financial strain, but if you can save for your children for the long-term from an early age you can contribute to the cost of further education. The sooner you start investing for the future, the better chance of greater returns. Investment companies offer a useful way for parents to access the long-term potential of the stock market. By investing in a variety of companies on your behalf, investment companies can spread investment risk and they are available from as little as £50 a month, or £250 lump sum. If you had invested £50 per month in the average investment company over the last 18 years you would now have £18,641."
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Homeowner graduates who have multiple debts in from their student days including credit and store card debts, could consider consolidating these with a secured loan. Consolidating debts with a secured loan puts all debt into one place and could potentially lower monthly outgoings. If opting for a secured loan to consolidate debt, it should be remembered that consolidating debt may increase the amount paid back overall and extend the repayment periods of debts. A secured loan is one of many options to
consolidate debt.
