Enthusiastic students are heading off to university – without realising that their degrees could end up costing them a staggering £100,000. A record 439,180 applicants were accepted onto courses this year, according to data from the Universities and Colleges Admissions Service (UCAS). But research by Save the Student suggests many will find the experience a financial struggle, leaving them with a debt hangover that lasts for years.
So, what can be done to help ease the monetary burden of higher education, and how can parents build a war chest to support their children?
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How much does university cost?
The cap on tuition fees has increased by £285 to £9,535 for the 2025-26 academic year, meaning a three-year undergraduate course now costs around £28,605. Most full-time students are eligible for a loan covering this sum. They will start repaying it once they earn above a certain income threshold. However, tuition fees are only part of the problem.
It’s also worth remembering that many degrees now last longer than three years – for example, medicine, engineering, or those where a master’s is expected – which can push total costs significantly higher.
The average student also faces monthly bills of £1,104, with almost half of this amount going on rent, according to the National Student Money Survey. Groceries are the next biggest expense at £144. Of course, £1,104 is just the average. Many students will face substantially higher monthly costs, with those living in London having to find £1,264.
Loans available
While many students qualify for a maintenance loan based on factors such as household income, the average monthly payment is just £600. Official data suggests the combined cost of this loan and tuition fees means many students will leave university owing an eye-watering £53,010. Unfortunately, that doesn’t include the extra £500 per month they need to plug the shortfall between the maintenance loan and their living costs.
Huge shortfall
These huge shortfalls were recently highlighted in research from the Centre for Research in Social Policy at Loughborough University. It put the total cost of studying for a standard three-year degree in England at £90,000 – rising to more than £100,000 for those studying in London. Professor Matt Padley, co-director of CRSP, said: “This evidence lays bare what students need – not just to survive, but to take part in university life – and it’s time for a serious conversation about the adequacy of the financial support provided.”
What can parents do?
Finding a part-time job and using an overdraft are among the most popular ways to secure the extra money needed to survive at university. Of course, many will also turn to their parents for help – and that’s where it makes sense to plan well in advance for your child’s Uni days.
The earlier you start investing for your child’s future, the greater the chances of building up a substantial nest egg to make further education less expensive. Starting from birth can make a dramatic difference. For example, if grandparents or relatives put aside just £50 a month instead of buying toys, and those savings grow at 7% a year, the pot could be worth around £21,000 by the time the child turns 18.
If you wait until age 8 to begin saving, you’d need to put away almost triple each month to reach a similar outcome. By contrast, if you can only start once your child is a teenager, the savings window is much shorter, so larger monthly contributions are needed to have the same impact.
For parents who still have at least a decade before their child turns 18 – and can afford to put money away – the numbers are still compelling. Saving £450 per month with ‘modest’ investment growth of 5% each year could produce a pot of £65,000 after 10 years, according to Fidelity*. However, even setting aside £100 per month could result in a fund of almost £15,000 over that time period, which will certainly be a huge help*.
Three strategies to help cover Uni fees
Pursuing a growth strategy
The longer you have before the money is needed, the more risk you can potentially take with your investment strategy. This often means you can consider growth-oriented portfolios. Of course, this will also depend on your personal circumstances and whether you can cope with fluctuations in your fund value on volatile stock markets.
Exposure to an emerging area is a favoured approach for many long-term investors, as it offers the possibility of growing at a faster-than-expected rate. We like M&G Global Emerging Markets. This is an unconstrained fund driven by bottom-up stock selection that’s run by lead manager Michael Bourke. The fund is managed with a long-term perspective and typically has low turnover, which means stocks aren’t frequently bought and sold.
A global strategy
You may prefer a global fund that has exposure to a diverse range of countries and multinational companies. The BlackRock Global Unconstrained Equity fund targets extraordinary companies in developed markets. Its biggest holdings include household names, such as Microsoft, Meta Platforms, Amazon and Mastercard**. As a result, it has a substantial allocation towards US-listed stocks. We believe this fund has a sound philosophy and investment strategy, with two top-performing managers, Alister Hibbert and Michael Constantis, at the helm.
An income strategy
If you’re in the fortunate position of already having a nest egg set aside to help fund your child’s education, then you may want to consider switching it into an income fund. This means you benefit from receiving a regular income – the amount will depend on how much is invested – that can help cover the monthly bills.
A fund we like is Artemis Income, which is run by the three-strong management team of Adrian Frost, Nick Shenton and Andy Marsh. This has been a stalwart of the UK equity income sector for over 20 years, offering a strong process and an impressive long-term track record. The managers typically hold between 50 and 70 stocks, with a bias towards large-cap equities. Its largest holdings include Barclays, Aviva and Tesco, according to the latest factsheet.
