University Education – How Much?!
When a child qualifies for a place at university, parents feel rightfully proud of the achievement made by their son or daughter. The hours of studying have finally paid off. However, if they have not already planned for the expense then they will need to make some significant sacrifices over the next few years as university education is not cheap.This week we take a look at the cost of going to university in UK.
A degree from one of the best universities in England is a highly prized academic qualification. As far as degrees from the English speaking world they are also some of the best value when compared to those in USA for example. However in recent years the cost of education in UK has risen with the introduction of student ‘loans’ rather than grants and tuition fees being trebled a couple of years ago.
At that time there was wide spread concern that the increase from £3,000 to £9,000 a year for tuition fees would exclude those from less privileged backgrounds. However the number of under 20’s,the age group affected by the increase and now in higher education is higher than ever before. According to Universities and Colleges Admissions Service (UCAS) there were over 677,000 applicants for places in the current academic year of which 74% were granted places. So if you are from UK and you have children they are more likely to go to university than at any previous time and if they apply they are more likely to be offered a place. Unfortunately, it is also going to cost more than at any other time. So what will this cost?
There are two sides to the equation: expenses and income. Student income traditionally came from grants however in recent years they have been converted to loans and those who qualify have been more narrowly defined. UCAS undertake periodical reviews of the cost of student life. Cost of living very much depends on what part of the country you live in, London being the most expensive. The cost of a typical under graduate course is £12,000 per annum which includes tuition fees, books and travel to and from campus. The cost of living can more than double this figure. But remember, the course is only 39 weeks a year, so students will probably move back in with Mum and Dad when they are not in their digs. For expats this will involve airfares and other travel costs, so you’ll need to take this into consideration too. So in today’s terms the cost of a university education is roughly £25,000 per annum for 3 years, a total of £75,000, based on a non-specialist 3 year course outside of London.
For most people this is a significant expense and needs careful planning well ahead of time. So how much should you save and when should you start saving. Based on a few assumptions about inflation and growth rates, if you started saving as soon as your child was born you would need to save about £295 per month. If you wait until he or she is 11 years old, then you would need to save almost £575 per month to achieve the same result. Of course, not all the expense needs to be funded from savings but if nothing is saved for the future the cost is about £2,000 per month for three years. If you have more than one child and they both go to university at the same time this can be prohibitively expensive, so start planning as soon as possible.
They type of plan you use would be dependent on your circumstances and you should seek professional advice. Some countries offer tax efficient savings plans specifically for education funding for parents and grandparents to use.
I hope the above was useful, if you have any questions or comments please let me know.