Two in five families use loans, credit cards to pay for college

Irish League of Credit Unions survey finds average monthly cost of third level is €428

Almost two in five families take out loans or use credit cards to cover the cost of sending their children to college, an Irish League of Credit Unions survey has found. Photograph: Frank Miller/The Irish Times.

Almost two in five families take out loans or use credit cards to cover the cost of sending their children to college, an Irish League of Credit Unions survey has found. Photograph: Frank Miller/The Irish Times.

 

Almost two in five families are taking out loans or using credit cards to cover the cost of sending their children to college, an Irish League of Credit Unions survey has found.

As tens of thousands of students wait to hear if they have been accepted into third-level education after Leaving Cert results were issued today, the survey shows that the average cost of sending a child to college is €428 per month.

The survey of 1,000 people found that, at 47 per cent, savings were the most frequently used means of covering the cost of sending a child to college (up from 42 per cent last year). This came in just ahead of money earned by parents month to month, which was used by 46 per cent of respondents. Grants were a means of covering the cost for 12 per cent.

The proportion of people borrowing or using credit cards to fund their children’s third level education remains high at 39 per cent but has fallen by two points since last year’s survey.

Credit union loans were taken out by 29 per cent of respondents to cover costs with credit cards used by 6 per cent; bank loans by 3 per cent and funds from money lenders by 1 per cent.

Almost two thirds of parents (64 per cent) said they struggled to meet the costs of sending a child to college. Two families in five (39 per cent) said it was difficult to meet the costs and 18 per cent felt they would not be able to manage them at all.

The Union of Students in Ireland said the findings were largely in line with reports from campuses across the State.

The survey by market research firm iReach found that the average cost of rent for a college student was €346 per month, up from €343 last year. Responses to the survey suggested that 44 per cent of students now lived away from home, up from 32 per cent last year.

Nine per cent said the cost of rent for their child was less than €200 a month, with the highest proportion (29 per cent) paying €301 to €400. Fourteen per cent of parents said they spent €501 or more on rent each month.

Four in five parents (79 per cent) support their children when it comes to college related costs. The survey said that 51 per cent of students worked to support themselves in college, with the average student who has a job working just under 19 hours per week.

The college registration fee or student contribution, which will be €2,750 in 2014-15, continues to pose difficulties with 6 per cent of respondents saying they could not afford to pay it and their child would have to drop out of college and a further 6 per cent saying it was the reason their child could not go to college.

A separate part of the survey on disposable incomes found that the amount of money people are left with at the end of the month after paying their bills has risen this year.

It found that average monthly disposable incomes across the population increased by €11 to year on year to €183.

Working adults saw the sharpest rise, with disposable income rising by €15 to €220 year on year.

More adults say they are in a position to save than a year ago with 46 per cent of respondents saying they had something to put away at the end of the month, up from 38 per cent a year earlier.