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New Students Expect to Pay 33,512 to Get a Degree
(15 August 2006)

With exam results and the new university fee structure on the horizon, the 2006 NatWest Student Money Matters survey reveals that sixth formers starting university this year expect to pay 33,512 for a three-year degree course. This is up from 28,600 last year and includes the new tuition fees. As a result, they expect to graduate with 14,779 of debt, an increase of 1,099 on 2005 figures.

Despite these figures however, 79% of 2006’s intake believe that going to university will help them with their future job prospects and 53% wanted to use the opportunity to train for a specific career such as medicine or law

Level of Graduate Debt Slowing

Graduate debt continues to rise, although at a much slower pace to previous years. Graduates now leave university with 13,252 of debt, an increase of 612 (5%) on 2005. That said, the percentage of graduates leaving university with debts of over 10,000 remained the same as in 2005 at 62%.

The average starting salary has fallen this year from 14,090 in 2005 to 13,860 in 2006, however on the other hand, more graduates (23%) did have a job confirmed on graduation (up from 18% in 2005). Again despite lower starting salaries, 56% of graduates admit that they have landed a good job, 41% are now totally independent from their parents and 43% claim to have a healthier bank balance (up from 28% in 2005).

Just over half (57%) of the students questioned admitted to being concerned about the amount of debt that they were in. However, only 22% (down from 29% in 2005) had actually considered packing it all in to pursue a full time job.

For sixth formers starting university this summer, the biggest concern was money being tight (71%). Worrying about finances continued to outweigh concerns about the educational aspects of university by 11%, as 60% were concerned about failing their exams or keeping up to date with the workload (59%).

Massive Increase in Part Time Workers

Students are now increasingly relying on part time jobs to finance their life at university. A massive 87% of this year’s intake believe that they will have to get a part time job and 46% of current students have to rely on their income from term time work to get by, working an average of 14 hours a week. Current students supplement their income by an average of 71.32 per week. The pressure of having to earn money continues to have an impact on students’ studies, with 31% admitting they had skipped lectures because of their part time job, although this figure is down significantly on those respondents in 2005.

Parents Footing the Bill

Despite debt increasing and part time work becoming a necessity, the good news is that two thirds of parents finance their children’s university education. 28% give regular amounts throughout the term, 26% get money from their parents as and when they need it, 8% get a lump sum at the beginning of each term and 4% got a one off amount when they started university.

Mark Worthington, Head of NatWest Student and Graduate Banking, said: “New students are clearly much more clued up about the financial realities of university than in previous years. Despite the anticipated cost of university rising by 17% on 2005, students are taking it in their stride and cutting back on their spending, meaning they only expect to graduate with 8% more debt than those not paying the increased tuition fees.

"University really plays a huge part in shaping a person’s future. It not only gives them the educational background needed to really succeed in the world of business but it teaches them valuable life lessons that enable them to stand on their own two feet successfully."

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:



Debts
Graduate debt risesSixth Formers anticipated debt
200613,25214,779
200512,64013,680
200412,18012,700
20038,1258,810
20025,6367,510
20015,1706,390
20003,1743,820




Spending Figures
Actual for StudentsAnticipated for Sixth Formers
Rent69.4576.94
Alcohol15.3016.65
Books7.4512.98
Supermarket Food shopping17.5819.65
Cigarettes 13.1712.56
Going out9.9614.25
Buying Clothes10.9214.38
Transport11.9713.32
Utility Bills12.2216.42
Telephone bills8.639.34
Eating out10.8314.33

* Based on 8 month term time plus three years tuition fees at 3,000 per year.

  • Mark Worthington, 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/ June 2006
  • 1,003 Graduates, 1,071 Students and 1,059 sixth formers were surveyed.