Opinion - New academic year brings stark financial realities
2015-09-01 17:14:56 -
Education
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By Brian McCrory, the president of the Irish League of Credit Unions

 

After a lot of hard work and a very nervous wait, some 58,000 Leaving Certificate pupils around the country received their results a couple of weeks ago. School-leavers and their parents have invested a lot of time, effort and energy to try and get the results they want, but that is not the end of the story by any means. Having done all of the hard work to earn their places, prospective students now need to find the funding to actually get them there.

 

In order to help us understand the difficulties students were facing, the Irish League of Credit Unions commissioned independent research to look at the costs associated with going to college. The results highlight the financial impact that college has on family spending and budgets, as well as the challenges and concerns parents have in relation to finance, grants, their children living away from home and job prospects.

 

Those parents who already have children in third level education know only too well the financial challenges to be faced in the coming weeks, months and years. Up until this point, the main focus for the year 2015 has been on getting through the Leaving Cert. Thoughts must now turn to how they will fund life after secondary school. In Ireland, 94 per cent of parents are on hand to support their children with college-related costs by contributing an average of €453 per month per child. However, 64 per cent of parents said that family budgets have been adversely affected by the increased registration fees, and 41 per cent find covering the costs of accommodation particularly stressful.

 

In terms of how parents cover the costs, not surprisingly the results show monthly income and savings are the most popular way in which parents fund their child’s third level education. Credit union loans are the next most popular method, followed by a bank loan. A whopping 59 per cent of parents expect to get into debt in order to finance the cost of third level education for their children; €5,030 is the average debt per child that parents will incur each year. Worryingly, 10 per cent of those thinking of borrowing have said they’ve considered an unlicensed moneylender a viable option.

 

The research also found that students living away from home are spending on average €1,033 per month on rent, transport, living and college-related expenses, including an average of €380 in rent per month. To help cover these costs, many of these young adults will find themselves in search of part-time employment for the first time. The results show that 69 per cent of students will work to fund or part-fund college. Students are working an average of 26 hours per week, getting paid an average of €11.50 an hour.

 

These findings, particularly the financial realities facing parents and students, are stark. It is clear that students and their parents are experiencing very significant pressure in trying to fund third level education. The increased registration fees combined with monthly rent and bills, books and materials and day-to-day expenses are a significant financial burden to many families.

 

But moneylenders are not the answer. Institutions such as credit unions and banks are available to support both parents and students as they prepare for the academic year. Some banks will try to attract students by offering short-term gimmicks to open an account or offer an interest free period on a loan before a higher rate kicks in. But it’s much better to shop around for loans offered at fair rates with flexibility to meet your specific needs.

TAGS : Academic year financial difficulties studies Irish League of Credit Unions College
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