Parents join University of Austerity as they take on student debt

8 September 2016

  • Two thirds of parent’s penny-pinch to fund child’s university costs
  • Many forced to take on debt, get a second job and even shelve retirement plans
  • A third of students would ask parents for money rather than work more hours
  • Two thirds used their student loan to fund nights out, holidays and even a car

Two thirds of British parents have embraced austerity by cutting back on their standard of living to pay for their children’s university education, according to a new poll.

The research, from Nationwide FlexStudent*, also reveals that many students spend their loans within the first few months on a range of outgoings, from holidays and cars to nights out and new clothes.

Parental austerity

The research, which coincides with the roll out of Nationwide’s new FlexStudent current account1, highlights that parents quickly find themselves stuck on a strict budget when their child goes to university, with many discretionary outgoings being reined in. This results in over two thirds (68%) having to make up the shortfall themselves. The top five spends falling by the wayside include:

  • savings (34%)
  • holidays (29%)
  • socialising (25%)
  • getting a new car (22%)
  • fun expenditures (22%)

Many parents are forced to take more extreme measures to ensure their children benefit from a university education, with nearly one in six respondents (15%) borrowing money or getting in to debt, and one in seven (14%) taking a second job or delaying early retirement (14%). But with parents estimating the bill for university to be in the region of £2,500 per year, totalling £7,500 for a three-year course per child, it’s perhaps not surprising that cutting basic outgoings is often a foregone conclusion.

Frivolous students

While parents are forced to scrimp and save, the poll reveals that students are less willing to sacrifice their lifestyle if they run out of money, with around one in three (30%) running to their parents when they have no money in the first instance, rather than forego nights out (5%), cutting back on what they spend on food (5%), getting a job (9%) or doing more hours at work (11%).

Students polled also admitted to being frivolous with their student loan, with 29 per cent saying they spend it all within a few months of receiving it, and just over one in ten (12%) admitting to spending it in the first month. More than two thirds (67%) have used it to fund nights out, buy nice clothes (67%), party (31%), go on holiday (30%) and buy a car (9%).

But while undergraduates are having fun, two thirds of students polled (65%) haven’t thought about how to pay off their student debt and nearly one in ten (7%) think they will finish university and walk into a job paying at least £40,000.

To compound the issue, the majority of parents (85%) surveyed admitted that they would give their child money if asked, with over two thirds (68%) saying they wouldn’t ask for it back, one in five (19%) admitting they would give their child money with no questions asked and only 3 per cent saying they wouldn’t give their child money as they want them to be independent.

To know or not to know

When asked whether they understand budgeting, nearly seven in ten (68%) students feel they were insufficiently taught about finance and were ill prepared for student life, with nearly a third (31%) saying they taught themselves everything they know about how to manage money.

Dan King, Nationwide’s Head of FlexStudent Current Account, said: “University can be an extremely expensive time for parents and students alike and often parents are expected to cover the shortfall, putting them under increased pressure and resulting in tightening their purse strings. For students to manage their own financial situation effectively, they need to understand how finances work and learn to budget, so they can stand on their own two feet.

“From an educational standpoint it’s vital that students are given guidance before and during university life, that’s why Nationwide, as a mutual, has created a student current account that is simple and flexible to use, with an interest-free and fee-free overdraft that puts the student in control. It also comes with a whole range of interactive education support and tools at, helping to ease the pressure financially for both parents and students.”

Nationwide’s FlexStudent current account, offers a range of benefits including up to £3,000 interest-free overdraft with no fees, one per cent credit interest on balances up to £1,000, exclusive access to FlexGraduate2 and the chance to win £15,000 to share3.

Notes to Editors:

*Research from Vital Research and Statistics: total sample size was over 1,000 UK students and parents (614 parents of children who are about to go, currently at or recently graduated from university – survey ran from 01/08/16 to 08/08/16 and 400 undergraduate students aged 18 to 25 – survey ran from 01/08/16 to 16/08/16)

1FlexStudent Current Account

Account Eligibility

  • The FlexStudent account is only available to individuals in the UK aged 18 or over who are accepted for a full-time UCAS registered course of two or more years’ duration.
  • Customers can only have one FlexStudent account open at any one time and it can only be held in the sole name of the customer.
  • The FlexStudent account can be opened from two months before to two months after a course start date.

Funding the Account

  • Customers must pay in at least £1,500 per year of study across two or more transactions and maintain a good credit record to remain eligible for the key account features.

Account Operation

  • FlexStudent can be opened and operated online, over the phone and in branch.

Credit Interest

  • 1% gross p.a. / AER variable on credit balances up to £1,000.
  • Credit interest is not payable on balances over £1,000.


  • Aged 18, subject to status.
  • There are no overdraft charges for any arranged or unarranged overdraft. The account is designed not to enter into an unauthorised overdraft position.
  • Customers can ask Nationwide for an arranged overdraft or ask to increase their arranged overdraft limit online through the Internet Bank, by calling Nationwide or in branch.
  • The overdraft is available as soon as the account is open.
  • The maximum overdraft limit depends on the customer’s year of study:
Year of Study Maximum available overdraft limit
1 £1,000
2 £2,000
3+ £3,000


  • The account comes with a Visa debit card which includes contactless technology.

Cash Withdrawals

  • FlexStudent customers can withdraw up to £500 a day from a cash machine, as long as they have enough funds in the account or up to £500 over the counter in a branch.

2FlexGraduate current account

Account Eligibility

  • FlexGraduate is only available to FlexStudent customers.
  • Students don’t need to do anything. Nationwide will write to customers on FlexStudent at least two months before we move their account to a FlexGraduate account, with full information about the account and its terms and conditions.
  • FlexGraduate customers will keep the same account number, sort code and PIN and will receive a new FlexGraduate debit card.
  • If customers don’t want to be moved onto FlexGraduate, they just need to contact us. FlexStudent customers are eligible for our other products, as they will be over the age of 18.
  • Any other products will be subject to credit checks and the terms and conditions of the specific products.
  • FlexGraduate has a maximum duration of three years for students on courses of three years or more. For courses of two years, students have a maximum duration of 2 years.


  • The maximum available limits will decrease in manageable increments. For example, for a three year course the overdraft will be reduced to:
    • £2,500 by the end of year one after graduation
    • £1,750 by the end of year two after graduation
    • £1,000 by the end of year three after graduation
  • For a two year course the overdraft will be reduced to:
    • £1,500 by the end of year one after graduation
    • £1,000 by the end of year two after graduation

3Prize Draw Terms and Conditions

  • The prize draw will close on 30th November 2016 and the draw will take place on 10th January 2017.
  • The prize draw is only open to FlexStudent current account holders whose accounts are open on the date of the draw.
  • The prize draw is free to enter and no purchase is necessary.
  • If you do not want to be entered into the draw, please tell us and your details will be removed from it.
  • 5 winners will be drawn at random from all entries received by the closing date.
  • The prize is £15,000 and the winners will be asked to nominate the person(s) they wish to share 50% of the prize with, which should be their parent(s) or legal guardian(s). The winners can nominate more than one person who will share that part of the prize.
  • The winners will be notified by email no later than 13th January 2017. If a winner does not respond to the promotor within 30 days of being notified by the promotor, then the winner’s prize will be forfeited and the promotor will be entitled to select another winner in accordance with the process described above.
  • The prize is non-transferable and no alternative is available.
  • The decision of the promotor regarding any aspect of the prize draw is final and binding and no correspondence will be entered into about it.
  • Details of the winners (name and regional area only) will be available on 28th February 2017 by contacting
  • The winners may be required to participate in publicity related to the prize draw which may include the publication of their name, regional area and photograph in any media.
  • Participants are deemed to have accepted and agreed to be bound by these terms and conditions upon entry. The promotor reserves the right to refuse entry, or refuse to award the prize to anyone in breach of these terms and conditions.
  • The promotor is Nationwide Building Society whose registered office is at Nationwide House, Pipers Way, Swindon, SN38 1NW.

Simply Rewards

  • Students are able to use Simply Rewards. All they need to do is register their card at
  • They will benefit from cashback on well-known brands when they pay with their Nationwide VISA debit card.
  • There are no points to collect or vouchers to print off.
  • They just need to shop as usual and so long as they’ve logged into Simply Rewards, seen the offer, and the purchase meets the criteria, the cashback will automatically be refunded to their account within 5 working days.

About Nationwide

Nationwide is the world's largest building society as well as one of the largest savings providers and a top-three provider of mortgages in the UK. It is also a major provider of current accounts, credit cards, ISAs and personal loans. Nationwide has around 15 million customers.

Customers can manage their finances in a branch, via the mobile app, on the telephone, internet and post. The Society has around 18,000 employees. Nationwide's head office is in Swindon with administration centres based in Northampton, Bournemouth and Dunfermline. The Society also has a number of call centres across the UK.

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