Wednesday, 13 August 2014

ILCU Launch Results of Costs of 3rd Level Education Study

Today, after a nerve wracking wait, 57,000 leaving certificate students around the country will receive their results. It is an anxious time for both parents and students alike and we wish everyone the very best of luck. Don’t despair if you don’t get the points that you wanted, there are plenty of options open to you and plenty of advice out there too. It is usually at his time of the year we take a look at just how much third level education costs. In July 2014, we asked parents of college going children about the cost of sending their children to college in Ireland. The results highlight what the impact of sending children to college (in financial terms) has on family spending and budgets as well as the challenges and concerns parents have in relation to finance, grants, living away from home and job prospects.

Here is what parents are saying:

79% of parents in Ireland support their children with college related cost by contributing an average of €428 per month per child. However, 64% of all parents struggle in some way with the costs of college. 39% of parents say it is really hard and feel the costs are constantly increasing with a further 18% saying that they will not be able to manage college related costs for their children at all.

In terms of how parents cover the costs – the tracker shows that savings are now the most common way in which parents fund their children’s third level education (47% of parents say they will use savings in August 2014 compared to 42% in 2013. This is followed with monthly income (46% in 2014 v 44% in 2013), credit union loan (29% in 2014 v 25% in 2013) is the third most common option followed by a grant (12%) 

The study also finds that many parents are planning ahead for college related costs for their children with parents are now saving for an average of 8 years to ensure they have enough savings to cover the cost of sending their children to college.

72% of family budgets have been adversely affected by the increased registration, this figure is the same as the tracker research findings in August 2013. 60% of parents say they will just about be able to manage to pay it. A further 12% say they can’t afford to pay it and are worried that their child will have to drop out of college as a result. Only 28% say the increased costs will have no impact on them.

42% of students receive a grant (this includes small grants like Erasmus mobility grant). This represents a decrease of 6% since 2013. 21% believe that the grant is sufficient to cover college related costs.  79% of parents believe the grant is not sufficient.

44% of students now live away from home compared to 32% in 2013. The average monthly rent has increased to €346 (countrywide) from €343 in 2013. 

42% of parents say that their biggest concern is that their child will not get a job after college, misuse of alcohol is the second most pronounced worry (14%)

51% of students will have to work to contribute to the cost of their college experience. A typical student with a job works an average of 19 hours per week throughout the academic year. Female students are working slightly longer hours than male students.

Going to college can be very stressful for parents as the cost of third level education can certainly be a significant financial burden. Families are already struggling with the wider impact of austerity and the economic downturn and paying for college has become increasingly challenging for many. The increased registration fee of €2750 alone puts huge pressure on family budgets but when you factor in all of the extras, rent, bills, food, travel etc, the costs begin to spiral.
 
We want to let people know that credit unions are available to support both parents and students as they prepare for the academic year. Credit unions offer some of the most competitive personal, student and education loan rates on the market. We encourage anyone who is looking to finance their education or who simply want some advice on planning ahead or budgeting to call into their local credit union and speak to a member of staff.

 
For Example

In relation to credit union rates, many offer a dedicated student loan rate, which is often significantly less that the credit union’s standard rate. This is done to make third level education as accessible as possible for students. Of those credit unions who offer dedicated student loan rates, the average rate is approximately 6.4% APR. Some credit union offer rates as low as 4%.

Sample Rates

For a €3,000 student loan at a rate of 4% (4.25% APR) with 12 monthly repayments of €255.45, the total amount repayable by the member will  be €3,065.40

For a €3,000 student loan at a rate 5% (5.1 % APR) with 12 monthly repayments of €256.82, the total amount repayable by the member will  be €3,081.87

 

Mountmellick Credit Union - 4% (4.25% APR)

Gorey Credit Union - 4.9% (5% APR)

Mullingar Credit Union - 5% (5.1% APR)

Castleblayney Credit Union - 5% (5.1% APR)

St. Anthonys and Claddagh  Credit Union - 6% (6.2% APR)

Castlebar Credit Union - 6.5% (6.7% APR)