subject: How getting a University Degree might put your child at a disadvantage [print this page] How getting a University Degree might put your child at a disadvantage
For most parents having a child who is attending university is a great source of pride, but of course it is not the main reason why most parents are thrilled at the prospect of their child attending university. The fact is that individuals who attend University are blessed with a superior education, a sense of independent and a much better chance of getting a higher paid job. In short, the people who attend University are given a head start in life, or so many of us believe. However, this may not be the reality.
It is no secret that University tuition fees are set to rise after the recent Government spending review and for many students University is about to get a lot more expensive. In order to fund the cost of studying for a degree many students will opt to take out a student loan.
Credit cards and overdrafts will also be used by students just to fund the cost of living leading to more and more students leaving University in a significant amount of debt. Naturally having a child start their working life with this level of debt is a massive cause of concern for most parents, but unfortunately, this is not the full picture
The truth is that the level of debt students leave University with, even if this debt is purely as a result of a student loan, is likely to hinder their chances of getting a Mortgage, making it exceptionally difficult for graduates to get on the Mortgage ladder
Most Mortgage lenders will base the level of borrowing they are able to lend a customer on the customer's income and of course their other financial commitments. At the point of application and underwriting the Mortgage lender will take details of exactly what it owed and to whom. Subsequently, Graduates who have had to borrow in order to fund their further education could find that they are able to borrow a significant amount less than someone earning the same amount who has not attended University and who therefore has not been saddled with the same level of debt.
In fact, a recent study indicates that Graduates may find that they are able to borrow approximately 12% less in some cases than non-Graduates. On a Mortgage of 150,000 this would result in Graduates being able to borrow approximately 18,000 less than people on the same salary who had chosen not to attend university
This revelation has left many parents and students rethinking their future plans and questioning whether going to University will in fact be worthwhile. It would seem that in some cases attending University may leave people at a disadvantage when it comes to buying their first home
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