Students who have started their degrees this year will be the last to benefit from lower tuition fees before they rise to £9,000 next year. But as well as leading to spiralling student debts, research from uSwitch.com, reveals that parents' finances will be pushed to breaking point too.
Worryingly, if the current squeeze on household finances continues and fees rise further, future generations could end up missing out as parents struggle to make ends meet.
The average student already graduates with a debt in excess of £21,000. And this is putting parents under financial pressure too. 41% of parents feel pressured to pay for their children's University fees which has led to over half of all parents paying the entire fee or contributing significantly. Four in ten of those parents who cover the cost do so to stop their child getting into debt, while over half (55%) pay because it's the only way their child could afford to go.
But nearly six in ten parents (56%) who support their child will experience a significant strain on their finances. Over a quarter save up over the years in order to cover the cost, but a third will be forced to raid their own savings.
Annual fees will rise to up to £9,000 a year from next year, and it's not just parents who think this is too expensive. In fact just a quarter of all people polled think universities should charge at all and over a third (36%) think university should be free for everyone. Of those who accept universities should charge, just 14% think £9,000 is acceptable. Over half reckon the maximum charged should be between £1,000 and £4,000.
Just 5% of people think university is of enough value to justify the fees and nearly four in ten think it isn't the best route for a career. And as the number of applicants for university continues to rise, nearly two thirds of people worry that degrees are losing their value But young people today face a catch-22 as, despite the high fees and student debt, three in ten people think children have no choice - they have to get a degree just to secure a basic job.
Parents point to employers as being both part of the problem and part of the solution. Over two thirds of people think that employers have a role to play by offering more entry level roles that don't require a degree. However, despite this sentiment, over one in ten wouldn't offer a young person a job without a degree.
Michael Ossei, personal finance expert at uSwitch.com, says: "The fact that future generations could miss out on University because of costs is very worrying. Young people looking at getting a degree today are facing a double whammy of rising tuition fees and a stagnant job market.
"To make matters worse, their parents, who may have been able to help out, are facing an uphill battle to keep their household afloat in the face of the rising cost of living, job losses and pay freezes. It is often the squeeze on their finances that will mean their children miss out on a University education.
"The good news is that loans for living costs are available to all students and this will only need to be paid back when graduates start earning over £21,000 a year. There are also grants available for anyone whose family household income is less than £42,600. For parents who want to plan ahead, it's important to get the best possible rate on a savings account - especially in the current difficult climate."