The new world of student finance

Student fees are on the increase and with 10% of students spending their £2,700 loan in the first fortnight, it’s no wonder that their parents have become key contributors to financial survival. While it’s true that a record-breaking 77% are working part-time to help themselves, 68% of students are turning to the Bank of Mum and Dad. Here’s our guide to some positive ways of broaching those difficult money conversations with your children.

The new world of student finance

Students and part-time work: how jobs compare

What sort of jobs offer a good income without compromising study time? It’s a useful discussion point between parents and children. Most students have a part-time job at some point. 40% of students consider having a term-time job commonplace, rising to 78% for holiday jobs. The new digital age offers a wealth of flexible and potentially lucrative work opportunities, with benefits including working from home, choosing hours, doing multiple jobs at the same time and finding a home for those unique skills. Our job matrix shows a selection of what’s available including pros and cons of each and can help involve parents in supporting a job choice.

student part time work

Student jobs mapped

student jobs

How families can survive those difficult financial conversations

Using the Bank of Mum and Dad to make up the financial shortfall for two thirds of students causes 15% of parents to borrow or fall into debt and 14% to get a second job or delay retirement. While 40% admit that their children’s first-year university financial management is their main concern, 25% admit to never speaking to them about it. It’s perhaps no surprise that 69% of students feel insufficiently informed about finance and ill-prepared for student life. An alarming gap in communication is underlined by the finding that that while 70% of parents don’t think their children have a credit card, the truth is that 94% do and 58% use it regularly.

how to survive difficult financial conversations

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The things they say – and how parents can help

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.

 ‘Just a quick call…’


The first 100 days of university can be a social and psychological whirlwind, which might explain why freshers spend £3,300 in that period. But you were young once too, so it’s good to be sympathetic, after all 35% of students feel overwhelmed by managing their own finances and 56% find living away from home more costly than expected.

‘It’s different for my generation’


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.

‘Actually I need a bit more…’


Four out of five students agree that a lump-sum loan payment is far from ideal, and would prefer smaller instalments throughout the term. If you help your children with a longer-term plan it will help them focus on managing their future finances and not treating financial assistance as just a short-term handout.

' Can I have it all in one go?’


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.

‘I can’t find a job anywhere’

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1. It protects their credit rating

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.


2. It’s all about life skills

Helping out or ‘bailing out’ while your child finds a job and gets back on their feet is not just about financial survival. It is a longer-term investment towards making contacts and building skills like budgeting, time management, commercial awareness, problem solving and self-belief; all invaluable when it comes to standing out in job interviews after graduation. It’s especially important when you consider that according to a recent survey, 91% of graduates consider being established in their career an important factor in their life.


3. Times are changing

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.


4. It’s a gateway to an adult relationship

You don’t have to hand out cash to make a big financial difference. Helping with transport, delivering groceries, buying books, taking them shopping and putting them on your insurance policy shows that you care. 84% of students want to see more personal finance education in schools, so they’ll be open to advice too. They can always repay you by helping when they get home


5. A calm and creative approach demonstrates how to solve problems

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.


Facing financial issues as a family

The Bank of Mum and Dad may be here to stay, but perhaps you could also offer a Students’ Advice Bureau! As your freshers face their first year of university and all the social and financial challenges (and temptations) it holds, families need to explain potential money problems and saving advice.(A good place to start is our student finance hub, our guide to student car motor insurance, new ISA limits and our student contents insurance guide ) At the same time, with all the money-making opportunities out there in the real world and online, students can help themselves, lose that sinking feeling, have the fully-rounded university experience they hoped for and head off into the world more prepared and ready for the start of term.

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