Scramble for low-cost university places begins

A Level students face a desperate struggle to claim their university places this year, before next year's tuition fee hikes, with twice as many applicants as there are places.

The scramble for places is due to the introduction of £9,000 tuition fees in 2012.

Successful applicants for 2011 term starts will only have to pay £3,290 a year in tuition fees.

Thousands of students are expected to be disappointed this year with 673,000 students trying to secure one of 350,000 places. A third of UK universities have announced they will not be offering clearing this year because of the high level of demand.

Average predicted debt for students starting in 2012 is £53,400, according to the Push student debt survey 2011. In comparison students currently expect to graduate with debt of £20,000-30,000, according to an Association of Investment Companies (AIC) survey.

As a result, a fifth of students plan to go to lower-charging universities, according to the AIC.

The number of students taking a year out or deferring has also fallen - from 47,000 last year, to 30,000 this year – as young people decide against taking a gap year to avoid the rise in tuition fees, according to the Financial Skills Partnership.

Start saving early

Despite the concern over higher university costs, Standard Life research shows parent and student expectation for how much university will cost are lower than official estimates.

Over half of parents surveyed (58%) predict their children will leave university with £40,000 worth of debt, yet both student website Push and Standard Life say debt levels are likely to be around the £54,000 mark.

Should you help your child repay their student loan?

"The findings of our research are positive as they show that parents have identified the need to save for their children's time at university," says Julie Hutchison, head of technical insight at Standard Life.

"Unfortunately their expectations of what that cost could be and therefore the target amount they want to save might actually be too low."

Hutchison advises parents to start saving for their children's university fees from an early age to try and prepare for the growing student debt levels they will probably face.

"Even though a student loan can be taken to cover all these outgoings, parents can also seriously help reduce these costs."

Investing £50 a month into an average investment company will reward the saver with a total pot of £33,146 after 21 years, according to the AIC.

Hutchison recommends saving in tax-efficient vehicles like an ISA or offshore bond.

"The tax benefits combined with the efficiency of compound interest could help grow your savings considerably and could make a significant difference to them."

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