The new world of student finance

All sympathetic parents will respond well to a carefully-considered approach to asking for money. But it is likely that you may get a quick call pleading for money from outside a club when they are suddenly caught short.

If you let them know that a well thought-through appeal based on incomings and outgoings, and an honest review of how they got into this situation will be more successful, you will both be happier.

When it comes to asking for money, more than half of students confess to not being entirely honest with parents. 41% ask for more than they need and 33% ask specifically so they’d have more money for going out. This is a difficult topic and may need to be handled gently as part of a wider discussion about allocating expenses.

Many parents will be happier to help out financially if children are doing all they can to contribute to the health of their bank account too, even if it’s only by cutting back. Did you know, parents estimate their own university bill to be around £2,500 a year, and you may have to reduce your own expenditure to account for this. If you can encourage your children to demonstrate their appetite for getting a job, either during term-time or in the holidays, your relationship will be less stressful. The digital jobs market can be very useful, explore this with them and explain how it works so you are both happy about what online working involves.

Young people getting into debt could be storing up future problems by ruining their credit scores. Talking about this to the ‘debt set’ could be a sound investment for the future. The stats might shock you, did you know 75% of students in a recent poll had no idea what a credit score was when they got their first credit card and 20% were forced to return home after misusing one, while 18% of over 30s are still paying off debts from their teens and 20s.

Technology is not the only big change for students; the financial outlook is challenging for them and collaboration with parents is likely to be essential. Graduating ‘Millennials’ could earn £8,000 less in their 20s than their predecessors, and by 30 will be 50% less likely to own their own home, having spent £44,000 more on rent. House prices and wages are so out of sync that in 2016 parents will help finance 25% of mortgages.

Try not to let emotions disrupt a good financial discussion (‘I knew this would happen!’). An open, honest approach with straightforward questions is the best way to come up with a solution. Be ready for surprises – 25% of parents believe their child doesn’t use an overdraft, but 98% of students do. If all seems lost, perhaps university isn’t the answer. Alternatives include apprenticeships, which combine education with earning. As many as a third of graduates regret going to university because of the burden of debt, while an apprentice can earn up to 270% more than a graduate over their career if they go into in the arts, media and publishing.