Manchester has a thriving student population and a healthy housing market – and our property accountants would suggest that well-meaning parents might want to put their savings towards their offspring’s deposit on their first home, rather than trying to pay off their tuition fees.
According to figures from the Association of Investment Companies, the average student debt upon graduation is now an estimated £53,000 for the 2012 intake – almost double the £27,140 expected by students, which in turn is higher than the £22,179 expected by their parents.
Yet 63% of parents plan to help their children pay for their university education – and this could be a well-meaning gesture that lands wide of the mark.
When given a direct choice between university costs, buying a first home, buying a car or going travelling, 46% of students and 59% of parents prioritised parental assistance with university costs; 34% of students would welcome help buying a home, but only 21% of parents expect to offer this.
But a student loan is repaid only when earnings go above a certain threshold, and is cleared in full – even if it has not been repaid – after a certain number of years.
As such, our property accountants would suggest that help with a deposit, to keep mortgage costs down and repay faster, might actually prove to be the more economical option, regardless of the amount of student debt your child accumulates.