FOOL'S EYE VIEW
Desperate Students Adopt A Lord

By Jane Mack (TMFJane)
May 11, 2004

Twenty years ago one person in eight went to university. Now it's at least one in three and the government aims to increase that to one in two by 2010.

With universities already facing a funding crisis, the government is in the process of introducing top-up fees so that, from Autumn 2006, universities will be able to charge students up to £3,000 a year for tuition. As many students will have to borrow this money, it means that anyone going to university will leave, not just with a degree but also with considerably more debt than their predecessors.

The government's higher education bill introducing top-up fees scraped through the Commons last month, but it still has to get through the House of Lords. As a result the National Union of Students has targeted this group of prospective saviours and adopted the novel idea of urging its student branches to, well, adopt a Lord.

According to the NUS Stop Fees Now website, branches are told: "For no money whatsoever, your union can become the proud surrogate family of a Peer! Yes, that's right, adopt a peer - and all your union has to do is love and care for them as if they were your own. With regular maintenance, a peer will make a lovely member of any union".

It may seem a desperate, if amusing, attempt by students to get the House of Lords on their side - so far around 45 peers have agreed to be 'adopted' - but then students are desperate. The NUS says the average cost of a degree is now as much as £20,000 and that 90% of students are currently in debt. They claim that top-up fees along with increases in the cost of living could raise student debt at graduation to around £33,000 by the end of the decade.

Parents and children may already be grappling with the idea of whether the benefits of a university degree will outweigh the enormous costs. But if you harbour hopes that your children will go to university, how can you teach your children to steer clear of the debt culture, when they're being encouraged to borrow more by the government?

The first is to teach them how to budget and how to save. If they're to manage their finances properly while they're at university, they will need to know how to count the pennies and if you can teach your kids about the value of money and the importance of saving, they'll be streets ahead of their fellow students.

The second, if they're still very young, is to start saving for them so that they have a fund to draw on when they are old enough to go to university. If you can invest £25 a month from birth into a simple index tracker, then your returns should enable you to pay those tuition fees of £3,000 a year so that your child isn't saddled with them. Invest a little more than that and they may be able to get away without having to borrow at all.

If you're about to head off to your own educational money pit at the end of the summer, then be prepared for two things. One is that it will be very hard to avoid building up some debt - give your budget some serious attention and stick to it as much as possible. Read this guide to student finance and find yourself a good bank account, avoid credit cards and take advantage only of the cheap student loans.

The other is that recent research from Royal Holloway, University of London (RHUL) has shown that debts cause some students to achieve lower grades than expected because they get depressed about them. Don't get depressed about them - everyone else will be in the same boat as you and, as long as you know you are doing your very best to manage the budget you've got, there's not much more you can do.

The way you handle your money at university will have a big effect on the way you manage your finances afterwards so take advantage of the learning curve.

And, finally, if you're a graduate who is still troubled by university debts, go to our Get Out Of Debt Centre and see what you can do to trim your spending and make the best use of your income to pay off the debts. You may not be able to adopt-a-Lord to help save you from penury but it's never too late to adopt a determined attitude to learn how to manage your money better.

Find out more about Saving Your Kids From Debt; A Simple Guide To Student Finance; Get Out Of Debt.