Families Will Struggle if Tuition Fee Cap Removed
David White, Chief Executive at The Children’s Mutual comments
on Lord Patten of Barnes, Chancellor of Oxford University, request
to scrap the cap on University fees:
“Removing the cap of £3,225 on annual fees
could prove financially ruinous for many parents who are already
striving heroically to provide for their children, not only in
childhood but also as they move into adulthood.
“Our research suggests that 57%[1]
of parents already have no choice but to retire later because of
the cost of supporting their adult children. The reality is that if
tuition fees doubled the total cost of attending university for
three years could reach £52,248[2], with this figure
rising to £63,167 if tuition fees trebled[3]. Any parent
thinking about sending their child to university in the future will
ideally start planning early for how they are going to help fund
it.
“By formulating a plan early, parents of young
children could avoid having to find significant lump sums for
university fees and expenses in the future. This is why we’re
urging families of small children to plan early and start saving
now.
“With three in 10 (28 per cent) parents either
remortgaging or planning to remortgage to fund their adult child
and more than half of all parents having to borrow
money[4] there is a very real concern that parents could
be jeopardising their own financial security to help their children
avoid university debt, and an increase in fees will only make this
worse.
“We believe the Child Trust Fund offers a ray
of hope to parents of younger children. According to our
calculations, if families were to save £24 a month into a CTF, it
could result in a fund worth nearly £10,000[5] which
could potentially be used to help with the costs of
university. However, parents, other family members and
friends can all contribute to a child’s CTF account up to £100 a
month and if this were paid into a CTF every month for 18 years, it
could result in £37,100[6] when the child is ready to go
to University.
[1] The Children's Mutual Cost of Children research – Q3 survey
by 72 Point of 1484 parents Jan 2010
[2] The Children's Mutual figures based on NUS stats. Based
on the National Union of Students estimate of the average
expenditure for the academic year 2009/2010 of £14,088 including
tuition fees of £3,225, adjusted for inflation at an assumed
rate of 2.5% a year for each of the second and third years of the
course. This amount applies to students resident in England and
Wales who are studying outside London. Welsh students may be
eligible for a grant (October '09).
[3] ibid
[4] The Children's Mutual Cost of Children Research –Q18 survey by
72 Point of 1484 parents Jan 2010
[5] This future projected value is based on money being invested
every month plus the Government’s initial £250 voucher and another
£250 at age 7 for 18 years in a Stakeholder Child Trust Fund
Account. We’re assuming an investment return of 7% a
year, and charges of 1.5% of the CTF account value each year.
The projected values aren’t guaranteed because the value of shares
goes up and down. So the final payout could be more or less than
this.
[6] This future projected value is based on money being invested
every month plus the Government’s initial £250 voucher and another
£250 at age 7 for 18 years in a Stakeholder Child Trust Fund
Account. We’re assuming an investment return of 7% a year, and
charges of 1.5% of the CTF account value each year. The projected
values aren’t guaranteed because the value of shares goes up and
down. So the final payout could be more or less than this.