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Parents 'unaware' of student debts

posted : WEDNESDAY, 30TH SEPTEMBER 2009 07:08:56 BST comments : 6

filed under : STUDENT FINANCE
- Search: student debt parents university

Parents are out of touch with the amount of the debt their child will face after graduating from university, a survey has suggested
Parents are out of touch with the amount of the debt their child will face after graduating from university, a survey has suggested

Parents are out of touch with the amount of the debt their child will face after graduating from university, a survey has suggested.

A poll of more than 500 parents found that almost two thirds (64%) are underestimating the level of debt teenagers will have, predicting it will total £5,000 or less.

In reality those starting their studies now, could face debts of more than £20,000.

The poll, commissioned by high street bank Abbey, found that parents are more aware of financial matters such as interest rates, with eight in ten correctly stating the current rate.

The lack of awareness about debt levels means that the third (35%) of parents who are planning to pay off their child's student debt are under-budgeting by a collective £10 billion, Abbey said.

The survey also reveals that almost half (48%) of parents trust their child to budget effectively while at university.

But a second poll, of 500 16-18-year-olds reveals that three quarters would like more help with managing money.

Abbey retail director John Thorpe said: "It's no surprise that the two groups have different views. They are at different life stages with parents having a dissimilar experience with student finance compared to their children.

"As a bank, we recognise the importance of providing financial information which will enable people to make informed choices about how they manage their money and as a result are calling for families to sit down and use their own knowledge and ability to work out how to finance further education most effectively."

Polls of 500 parents and 500 16-18-year-olds were conducted in August 2009.

    Write on..
    Sunday, 27 September 2009 20:50:46 BST

    The Debt Collector is right.New Labour simply became another way of referring to Big Brother.To add insult to injury, though, we are not even being left with our national identity. Baroness Scotland (who is not English) pays a fine and keeps her well-paid job - but SHE was responsible for passing legislation that means that I (an Englishman whose parents, grandparents, greatgrandparents, etc. were all English) now have to prove I have the right to work in my own country.This is a a mad country that fails to act sensibly by rebelling against the repression forced upon it by a political party that has never been supported by more than about a quarter of the electorate.Democracy? HA!!

    Jill
    Sunday, 27 September 2009 13:37:41 BST

    I have a son who graduated last year but is still un able to find work, what I did not realise was that his uni debt has interest added onto it even though he is not working so therefore getting deeper in debt, as he nows says he wishes he had not gone to uni as he now has debt with no hope of paying it off

    The Debt Collector
    Sunday, 27 September 2009 11:41:37 BST

    I have never agreed with Student Loans. As these loans encourage signifcant borrowing, it is scaring off EXACTLY the Students who want/need Higher or Further Education. The old grant system worked fine: if you mucked about on the course, or did not hand in your assignments on time too oftern, you were thrown off. As for parents not realising that their children are running up debts, they must be blind, deaf and have learning difficulties themselves. We have known that this loan scheme was a con from day one, and everyone should have seen that. Surely they must understand what a loan means!The Student Loan was the most dangerous threat to education this Country has since the basic school system began in the 1700's. To me, this is absolute proof that Labour and indeed most Political parties prefer a dumbed down society because they are easier to control. or less likely to challenge Big Brother. George Orwell predicted this in the novel "1984". And so much of it has come true

    Roger Gray
    Sunday, 27 September 2009 05:26:34 BST

    my son has just started and will have loans of £6000 per year for fees and accomoddation which means he will leave with a debt of £18000 plus interest from the government and may chose to borrow additional sums from the bank.Not a great start in life and then will need a mortgage.

    Over a Barrel
    Saturday, 26 September 2009 21:44:08 BST

    The more they owe, the more likely they are to declare themselves bankrupt... Great start ...The sensible thing is to avoid paying university fees and find another way to make a living...

    Virginia Seager
    Saturday, 26 September 2009 21:04:12 BST

    Hi-this is a matter I feel realy strongly about as my child has proved totally inept ass money management - has monumental student debt & is still offered overdraft facilities & credit card by the very bank that holds his account & has evidence of his inability to pay -they the steep penalties on to his account.When we his parents try to attempt damage limitation the bank will not talk to us as he is regarded as an adult - even though we are their only chance of receiving payment.I am particularly stressed my this situation & talking to parent I realise Iam not the only parent in this dilemma.To give the message that it is OK to strt adult life with at least & £12000 debt is wrong & parents should be given some oopurtunity to police this if neededI realise that some young adults can manage debt sensibly but many can not

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