Half of parents cut spending on family’s clothing and goods to cope with third level costs

Posted on: 20 Aug 2018

• Nine in ten parents help fund their child’s third level education and contribute on average €584 per month

• 48% of parents in Ireland who fund their child’s third level education will cut spending on clothing and goods for other children in the family to cope with costs

• Six in ten parents expect to get into debt due to third-level costs

• Average expected debt is €2,425 per child per year

• Third level students living out of home spend double what those living at home spend (€1,229 compared with €667)

• Seven in ten students are taking jobs in an effort to cope with third level costs

• More than a third are skipping lectures to work

 As the first round of CAO offers are received this morning, students and their parents are facing into the expensive reality of third level education in Ireland. A national survey commissioned by the Irish League of Credit Unions (ILCU) has found that nine in ten parents are helping to fund their child’s third level education. More than three quarters (78%) are struggling to meet these costs. Students are also finding it difficult to cope financially, with 71% working to support themselves, up from 66% last year. 610 parents of third-level students and 466 students responded to the online survey of over 2,300 people carried out in July 2018 by i-Reach Insights.

What Parents Say

Parents who help fund their child’s third level education estimate they pay €584 euro per month during the college term. This has increased from the average €535 monthly contribution last year. The numbers saying they are paying more than €1,000 per month has almost doubled since 2017 (10% compared with 17%). Almost four in ten (39%) say their child receives a grant for college, but close to seven in ten of these parents say the grant is insufficient to cover costs.

Significantly, 48% of parents who fund their child’s third level education say they will have to cut spending on clothing or goods for other children in the family to cope with costs. Close to a third (31%) will sacrifice spending on food/groceries and three quarters (75%) will slash the amount spent on holidays. A quarter say they will reduce spending on household bills.

Given these findings, it’s perhaps no surprise that money issues remain the biggest concern for all parents of college students (42%). This has increased in importance since last year when a third said finance was their biggest college-related concern. In comparison, just 16% say their biggest worry is that their child won’t get a job after college, while 13% are mostly concerned about misuse of alcohol and drugs. More than half of all parents (54%) say they are particularly stressed about paying for accommodation during the college term.

Six in ten parents (62%) expect to get into debt funding their child’s third level education, and estimate that the debt accrued will be more than €2,400 per child per year. Worryingly, there has been an increase in the overall numbers approaching moneylenders. 8% of all parents responding to the survey say they have approached a moneylender, compared with 3% last year. An additional 7% say they intend to approach a moneylender to cover third level costs this year, up again from 3% last year. Almost double now say they consider moneylenders a viable option – 12% of parents this year compared with 7% in 2017.

On a more positive note, there has been an increase in the numbers saying they are funding their child’s third-level education with their savings. Half of all parents now say they are using their savings, up from 43% last year. Just 4% say they are using their credit card, down from 10% last year. 37% say they are using credit union loans, down slightly on 39% in 2017.

However, with so many struggling to cope with third level costs, it’s perhaps no surprise that the majority (47%) are in favour of abolishing third level fees altogether. Almost a quarter, however (22%), are in favour of a ‘state loan’ whereby graduates would pay back the cost of their course when they start earning.

Commenting on the findings, ILCU Head of Marketing and Communications, Paul Bailey, said: “Our survey once again shows that the cost of third level education is a very real and daily struggle for a substantial percentage of parents. It’s encouraging to see the increase in numbers saying they can now fund college with their savings, thanks to a healthier economy. However, we are concerned at the increase in those saying they will approach moneylenders in an effort to cope with costs. Although the overall percentage of parents seeing moneylenders as a viable option is quite small, we view any increase as worrying. We want parents to know that their local credit union provides education loans at far more reasonable rates than moneylenders, and that credit union staff are always on hand to help with budgeting guidance.”

What Students Say

Students living outside of home say they are paying more than double what those living at home spend for the college term. Those renting estimate they are spending €1,229 per month. Students staying at home say they are spending €667 each month.

The numbers reporting that they live at home has increased. Almost seven in ten (69%) say they lived at home during the last academic year (2017/2018) compared with 63% the previous year (2016/2017). When asked about accommodation costs for students, more than nine in ten (96%) said these costs were either extremely high or very high.

Passing exams and financial worries are the two greatest college-related worries for students. 59% said passing exams was their main concern. 57% said college-related finance/debt was a very significant concern - revealing the extent to which money issues are a focus of student’s college lives.

The majority (65%) say they will sacrifice spending on their social life in an effort to cope with costs. Over half say they will cut spending on clothes. Of concern is that a quarter say they will sacrifice spending on medical and dental check-ups because of third-level costs. Close to two in ten (17%) say they will cut down on travel home to visit their families.

The overall numbers saying they have to work to support themselves through college has increased. Seven in ten students now say they are working in an effort to cope with costs, compared with 66% in 2017. Of those working, 30% work full-time, 65% work part-time and 8% work ad-hoc hours. Female students appear to work slightly more than their male counterparts, saying they work an average of 20 hours per week compared with 18 hours. Both genders report they earn the same average hourly wage of €11.

There is a noticeable increase in the numbers saying they are skipping lectures to work. Well over a third (35%) are opting to earn money instead of attending lectures, compared with 22% last year. 

Not surprisingly, the majority of students (46%) say third level fees should be abolished. This is consistent with the views of parents at 47%. Similarly, a quarter are in favour of a ‘state loan’ arrangement.

Reacting to the findings, Paul Bailey said “Students, just like their parents, are finding that the financial side of college life can be a burden. It’s worrying to see that finance and debt is such a significant concern for so many. Furthermore, at a time when they should be concentrating on their education, greater numbers are skipping lectures in order to earn some extra money. On a more positive note however, 85% of students expect to find work in Ireland when they graduate, compared with 75% last year. It’s heartening that overall, students are optimistic about their future, despite their current struggle with third level costs.”