Irish parents to pay up to €10,100 to support child in college

Many families unprepared for cost of third-level education, Aviva research finds

More than a quarter of Irish parents are saving for their children’s education. Photograph: Alan Betson / The Irish Times

More than a quarter of Irish parents are saving for their children’s education. Photograph: Alan Betson / The Irish Times

 

Three out of four Irish parents think student loans could be a great idea according to a new survey, which also unsurprisingly reveals that parents appear increasingly unprepared for funding third-level education.

The survey, carried out by Red C for Aviva, found considerable openness and some support for the idea of a student loan system with repayment to be contingent on the income earned by graduates.

The survey polled 1,280 adults in a controlled representative sample earlier this year. Just over a fifth of parents were opposed to the idea, but a clear majority (59 per cent) felt it was an option at least worth exploring.

The introduction of student loans in Ireland was one of the options for funding third-level education contained in the Cassells Report, Investing in National Ambition – A Strategy for Funding Higher Education.

“It’s not surprising that parents want to explore all options for funding higher education, including the option of a student loan system. But whatever the outcome of that debate, education will continue to be a big item in the family budget,” Ann O’Keeffe, head of individual life and pensions at Aviva said.

High interest rates

However, the use of student loans in countries like the UK has been criticised for burdening young graduates with significant loans which they may struggle to repay.

Last month the Institute for Fiscal Studies (IFS) criticised “very high” interest rates on student loans, which was why three-quarters of UK students will probably never pay off their loans in full.

The finding on student loans comes as parents appear increasingly unprepared for funding third-level education. Just under half of parents responding to the survey (49 per cent) say they have made no financial preparations to meet the cost of putting their children through third-level education.

According to Aviva’s Cost of Education Report, on average, parents can expect to pay out €5,122 a year to send a child to a third-level college or university. If the student has to move away from home to go to college, the expected cost is almost double, at €10,125.

The survey found that more than a quarter of Irish parents (27 per cent) are saving for their children’s education. Overall, 41 per cent are either currently paying or intending to pay for their children to go to college or university and the majority said they expected to meet the cost from a combination of regular savings, salary or other income.

One in two expects to get a third-level grant for their children, while 18 per cent said they would rely on help from grandparents or other family members. Over a third (35 per cent) has a savings account specifically earmarked to cover the cost of third-level education.