“The next generation of university students will pay a high price for their degree. The application process for courses starting in September next year opens in six weeks and many students and their families are weighing the implications of tuition fees of up to £9,000 a year.
These fees, plus living expenses while at college, will mean many students graduating with debts approaching £50,000 – equivalent to a small mortgage. And like a mortgage, the burden of this debt can be spread over many years.
Changes to the student loan system mean that some future graduates will end up with lower monthly repayments than they do today (see below). But for many students, the cost of a degree will become an important factor in deciding when, where and how they study.
Philippa Gee, who runs independent adviser Philippa Gee Wealth Management in Church Stretton, Shropshire, says: ‘You will find more students asking fundamental questions such as, “Do I go to university?” or “Can I study at a university close to home and save on living expenses?”.’
One person affected by the new fees is Amy Brandhorst, 17, from Bromley, south-east London. She is studying for A-levels in English literature, economics and art at Chislehurst & Sidcup Grammar School. She hopes to study English literature from autumn 2012 and has been attending university open days in the past month.
Amy is concerned about the impact the new fees will have. ‘It’s a huge amount of money I’ll have to pay and I’ll be in big debt when I leave,’ she says. Her older brother, Tom, 19, is already at Bristol University and Amy says: ‘The fact that he will graduate with potentially only one third of the debt that I might is unfair.’
Like most parents, Amy’s father, Ralph, 58, a graphic designer, and mother, Fiona, 49, who works in public relations, will make a contribution towards her living expenses.
Amy will also do her bit. She has a part-time job as a sales assistant at a fashion shop, earning £6.25 an hour, but she says: ‘Even if I worked every shift I could, I wouldn’t be able to save up anywhere near the amount of money I need for university.’
That means Amy will have to take a loan to cover her tuition fees. Having discussed the new loan system with her teachers, Amy says: ‘I hope it should be manageable as you only have to pay back small amounts each month after graduation.'”