That is the finding of HSBC’s report, The Valuation of Education – The Price of Success, which found that one in three parents are taking on second jobs and working overtime in order to pay for their children to attend university.
Of these parents, 85 per cent were relying on their day-to-day income to financially support their children throughout their education.
Katie Docherty, chief operating officer for retail banking and wealth management at HSBC Australia, said that this is reflects the importance Aussies place on tertiary schooling in Australian society, with 59 per cent of parents with children at university agreeing education is a worthwhile investment.
“With the employment landscape changing rapidly, education has never been more important than it is today. Australian parents know this and are clearly willing to go to great lengths to support their children financially with their tertiary studies,” Ms Docherty said.
HSBC’s findings mirror ABS data released earlier this week, which found that half of all new jobs filled in Australia in the September quarter were secondary jobs.
Close to a third, 30 per cent, of the increase in secondary jobs was in the administrative and support services sector, followed by the accommodation and food services industry (29 per cent).
PREPARATION IS KEY
Of the parents surveyed by HSBC, a significant 32 per cent (almost a third) said that they wished they had had the foresight to start saving for their children’s university expenses earlier.
The report found that parents contribute an average of $17,124 towards their children’s further education, with only 3 per cent drawing this money from specific savings or investment accounts established in advance.
Furthermore, 42 per cent indicated that they did not actually know how much they were contributing to their child’s education.
This cost is taking its toll, with more than half of parents (56 per cent) saying that they have sacrificed leisure activities, such as eating at restaurants or going to the movies, in favour of paying their child’s tertiary education expenses.
Despite this, nearly half (47 per cent) admitted that they were worried this will still not be enough to financially support their children throughout the entirety of their education.
“The direct and indirect costs add up,” Ms Docherty said.
“Australian students are spending on average $50,311 over the course of their degree, with their parents chipping in more than one-third of this amount.”
STUDENTS WORKING FOR PLAY
That leaves a shortfall of just over $33,000 between what parents say they are contributing and what students are spending during their university years.
This is covered by the students themselves, with 89 per cent of Australian students working whilst they study, nearly half (47 per cent) out of necessity.
HSBC found that, on average, students are spending more time working whilst at university than on their studies, with 4.2 hours a week in dedicated to paid employment.
This is compared to 2.9 hours spent in lectures, 3.1 hours spent studying at home and 2.0 hours spent at the library.
However, the report suggests that students are still finding the money to splash on social and leisure activities, with the majority spending over $2,300 more on eating out or ordering takeaway than on their textbooks.
Students also spend an average of $2,976 on entertainment and $1,668 on clothes and make-up over the course of their degrees.
According to Ms Docherty, these spending habits can become an issue, as many are turning to short-term borrowing to finance these habits.
She said that students are forking out an estimated $2,037 to pay back credit card fees, personal loans and other debts over the course of their degrees.
“Being realistic upfront about the personal and financial expenses, and putting in place reasonable steps to manage these as a family, can help avoid financial pressures and short-term borrowing, enabling students to stay focused on what’s most important at this time: studying,” Ms Docherty said.
Unsurprisingly, this is a major concern of parents, with 82 per cent saying that they are willing to cover their child’s basic living costs to ensure they focus on their studies.