- Long shadow of Covid continues to fall over university
students
- Male students more optimistic about financial prospects
than female peers
With A-Level results day approaching on 17 August, many anxious
school leavers will be considering what comes next. More than
half of current or prospective university students (54%) have
considered not going to university because of the costs involved,
according to the results of an annual survey1 from the
Association of Investment Companies (AIC).
This is the highest percentage since the question was first
included in the survey in 2014. In 2020, 2021 and 2022, the
comparable percentages were 31%, 35% and 35% respectively.
Source: AIC/Opinium Research
In a further sign of financial strain, less than three-fifths of
students (59%) believe it is realistic for their parents to help
them financially while they are at university, down from almost
two-thirds (65%) last year. Not surprisingly, ability to help is
related to social class, with 65% of students from families from
social grades ABC1 believing their parents will help versus 47%
of students from social grades C2DE.
Covid’s long shadow
Like the virus itself, the impact of Covid-19 on students’
experience and expectations of university is still lingering.
Around four-fifths (81%) of graduates who were at university when
the pandemic started say that it made their time at university
worse value for money. Among current students, a majority (57%)
say that Covid-19 has made their time at university worse value
for money.
Around a quarter (24%) of students say they considered not going
to university at some point because of Covid.
Will students ever pay off their debt?
With the government announcing plans this year to extend the
period after which student loans are written off from 30 to 40
years, more students think they will eventually pay off their
debt than in last year’s survey – but it’s still a minority.
Over two-fifths (44%) of students who have a student loan, or who
are planning to have one, believe they will eventually pay it off
in its entirety, compared to 32% in last year’s survey.
However, there is a marked difference between male and female
students, with 60% of male students believing they will
eventually repay their whole loan versus 33% of their female
peers.
Parents do what they can to help
Among parents with children at university, or who expect their
children to go, supporting their children through their degrees
is still a clear priority. Over half of parents surveyed (52%)
consider this to be the highest priority when it comes to helping
their children out financially, with 31% of respondents
prioritising contributing to a first house purchase, 7% a car,
and 5% travel.
However, more than three-quarters of parents (76%) say the rising
cost of living has made it more difficult to help.
Parents overwhelmingly favour cash savings when it comes to ways
to save for their children. Nearly two-thirds (63%) of
respondents use cash, with only 16% using shares, 15% investment
trusts, 11% bonds and 10% property (respondents could select more
than one option). Over four-fifths (85%) of parents have saved or
invested for their children’s future.
Only about a fifth (19%) of parents realise that it’s possible to
invest in the stock market for as little as £25 a month, with 41%
believing minimum investments were higher than that and a further
41% not sure.
Annabel Brodie-Smith, Communications Director at the
Association of Investment Companies (AIC), said: “The
cost of university is clearly putting increasing pressure on both
students and parents. While it’s encouraging to see the
overwhelming majority of parents saving for their children’s
future, it’s clear that only a minority are taking advantage of
the long-term growth potential the stock market has to offer.
“Investment companies can offer diversified access to the stock
market and are suitable for investors who are putting money away
for periods of at least five years, but preferably ten or longer.
They can make great investments for parents who are saving for
children. However, any stock market investment can go down as
well as up. If parents aren’t sure whether investing in the stock
market is right for them, they should consult a qualified
financial adviser.”
- ENDS -
Notes to editors
- The surveys of students, parents, graduates and non-students
were conducted on behalf of the Association of Investment
Companies (AIC) by Opinium Research. For the main students
survey, Opinium surveyed 1,000 students who are at university, or
planning to go to university. For the parents survey, Opinium
surveyed 1,000 adults with children aged 13-21 who they expect to
attend or are attending university. For the graduates survey,
Opinium surveyed 200 graduates aged 21-35 who have completed
their degree in the last five years. Finally, for the
non-students survey, 250 students who are not at university and
do not plan to go were surveyed. All respondents were UK-based.
Fieldwork for all surveys was conducted between 25 July and 7
August 2023.
