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Parents dig deep to avoid children taking student loans

31st March 2006
By Staff Writer

New research from Halifax Unsecured Personal Loans shows that a large proportion of parents will opt to take on the financial responsibility of funding their children through university as an alternative to their child taking out a student loan.

The research showed that over four in every ten parents (42%) had either had children at university who did not take a student loan or did not expect their children to take a student loan as a means of funding for their university education. In addition, more than 60% of parents would consider other options as an alternative to using a student loan.

Among the options considered for funding their child's university course, 31% of parents thought they would work more hours. Over one in five (22%) would consider getting a second job. A third (33%) would resort to dipping into their retirement fund savings, while 10% of parents would consider a personal loan as another option.

The survey results also revealed the extent to which parents are prepared to sacrifice their own plans and financial assets to cover or contribute to their child's university costs. Holidays are the luxury that the highest percentage would sacrifice in favor of education with 66% of parents prepared to miss out on their trips away.

Putting on hold home improvements such as new kitchens and bathrooms (63%) and conservatories (59%) was also considered a necessary sacrifice by many parents. A lower percentage of parents would give up buying a new car with 56% prepared to put this on hold whilst only 49% would hold off on moving house.

Whilst many parents choose to cover the costs of sending their children to university themselves, only a small percentage have savings in place to use specifically for this purpose. The majority of parents do not have specific savings earmarked for their children's education - 73% of respondents do not have an education savings fund.

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