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New Students Expect to Pay £28,600 to Get a Degree
(10 August 2005)

With A Level results just around the corner, the 2005 NatWest Student Money Matters survey reveals that sixth formers starting university this year expect to pay £28,600* for a three year degree course, including the current tuition fees. What's more, they expect to graduate with £13,680 of debt.

This year's freshers are feeling somewhat happier they are starting university in this year's intake, as 49% admit that they would feel less inclined to go to University in September 2006 because of the new charging structure coming in.

Graduate Debt Continues to Rise

Graduate debt continues to rise, although the pace is slowing. Graduates now expect to leave university with £12,640 of debt, an increase of £460 (3%) on 2004. That said, 62% of graduates left university with debts of over £10,000, an increase of 3% on 2004..

The good news for graduates however is that the average starting salary has risen again this year, to £14,090 (£13,600 in 2004) and 18% even had a job confirmed on graduation, which therefore shows the value of a university education. 40% of graduates admit that they have landed a good job, 42% are now totally independent from their parents and 28% claim to have a healthier bank balance.

Nearly two thirds of students admitted to being concerned about the amount of debt that they were in. However, only 29% had actually considered packing it all in to pursue a full time job. Unsurprisingly, 40% of those with the highest debts has contemplated leaving university because of it.

For sixth formers starting university this summer, the biggest concern was money being tight (73%). Worrying about finances outweighed concerns about the educational aspects of university by 8%, as 65% were concerned about failing their exams or keeping up to date with the workload.

Part Time Workers on the Up

Students are now increasingly relying on part time jobs to finance their life at university. 39% of students have a part time job, an increase from 34% in 2004, working an average of 15 hours a week. Part time work brings in an extra £77.66 per week to the average student's income and without it almost 80% claim that they couldn't afford to go to University. The extra income that a part time job offers can however come with its pitfalls, as 41% admitted that they had skipped lectures because of it.

Parental Support Back on the Up

Despite debt increasing and part time work becoming a necessity, the good news is that almost a third of parents are now giving their children regular amounts to fund their university education, an increase from 28% in 2004. What's more, 25% get money from their parents as and when they need it. In 2004 there was a marked decrease in the number of students getting parental support, however this year there has been an improvement with only 29% not getting an assistance at all.

Ann-Marie Blake, Head of NatWest Student and Graduate Banking, said: "University is an investment in your future and nowadays a degree is a prerequisite in most well paid jobs. It is a great footing for your future life and helps you learn to stand on your own two feet.

"It is great to see that the level of graduate debt has not risen at the same pace as in previous years, which could be due to the increase in parental support that we have seen this year. However, concerns about increased tuition fees should be considered for future students."

To help students understand the change to university funding and how it affects them, NatWest has developed a handy guide to student finance. The guide covers Government Support and the finance available from banks and the Student Loans Company and aims to remove confusion around the financial aspects of university for parents and students alike.

Notes to Editors:

• Ann Marie Blake, NatWest Head of Student and Graduate Banking, is available for interview.
• Case studies are also available on request.
• Research carried out by Virtual Surveys Limited in May 2005.
• 1,000 Graduates, 1,472 Students and 1,006 sixth formers were surveyed.

Download the Money Matters pdf (313KB)

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