Parents opt out of student loans

For some students, going to university means taking on responsibility for their well-being and finances for the first time, as well as their first taste of real financial burden – the student loan.

However, new research reveals that many students are avoiding the financial mill stone of the student loan thanks to their parents.

Halifax finds that four in ten parents have children going to university who are not taking out a student loan.

In addition to this, more than 60 per cent of parents said they would consider other options to a student loan, which would lay the onus of financial burden on themselves rather than their offspring.

According to the Halifax Unsecured Personal Loans' research, the most popular alternative to a student loan is parents dipping into their retirement fund to pay for their children's living costs and tuition fees, with 33 per cent choosing this option.

This is followed by 31 per cent of parents considering working more hours, 22 per cent getting a second job, while ten per cent would consider taking out a personal loan.

The research finds that parents in Northern Ireland are the hardest working, with 50 per cent willing to work longer hours, while 36 per cent said they would take on an extra job to get their kids through university.

Ian Larkin, head of Halifax Unsecured Personal Loans, said: "Our research shows that many parents would prefer to take on the financial responsibilities of funding their children through university rather than them take on a student loan."

A massive two thirds of parents said they would be willing to put a luxury like a holiday abroad on hold, to pay for their child's education.

However, such sacrifices can be avoided if parents set up a savings account when their children are at a young age, specifically designed to get them through university.

But of the 956 parents quizzed, only 26 per cent had set up a savings account for their child's education.