Parents in debt to fund college costs

More than half of parents are going into debt to the tune of €5,000 to fund their children’s third-level education.

A total of 54% of parents in Ireland will take on debt of approximately €4,300 to help their children attend college and university.

While not all parents borrow money, with some relying on savings and grants, a total of 87% of parents support their children financially through college.

These figures are from research into the cost of third-level education in 2016, published by the Irish League of Credit Unions (ICLU) today.

The willingness of parents to go into debt in order to fund their children’s third-level education is linked to the rising living costs for students. Per month, it costs a student in rental accommodation, €1,048 to live. A student, who remains at home, incurs a monthly cost of €530.

Parents who help a child through college, contribute €447 per month to the costs.

In terms of where a parent borrows money from, 37% take a loan from a local credit union, whereas 6% borrow from a bank.

Some parents admitted to using credit cards and money lenders in order to support their child. Some 4% of parents borrowed from a money lender and 7% racked up debt on a credit card.

Parents were also asked five questions in relation to the “struggle” to cover third level education costs.

Overwhelmingly, 53% said: “Yes, it is really hard, costs are constantly increasing.” This is compared to 9% who answered that they did not struggle “at all” to send their child to college.

Some 18% admitted to saving “over the years”. Most parents (30%) saved for between five and six years to ensure they have enough money put aside for college costs. The average amount being saved is €8,150.

Sinead Butler from ILCU said this time of year can be a very stressful experience for parents. “Families are already struggling with the wider impact of austerity and paying for college has become increasingly challenging for many.”

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