Student debt & the 'Bank of Mum and Dad'

65% of parents are currently helping to fund their child through university or have plans to do so in the future, according to the latest research into student debt by the Association of Investment Companies (AIC).

Nearly a quarter (24%) of those parents surveyed who intend to financially support their offspring through university plan to rely on 'all or most' of their cash savings to do so, and nearly half (49%) plan to use 'some' of their cash savings pot for the same reason.

An additional 11% of parents said they plan to sell their financial investments to cover the costs, and 9% plan to sell any shares they have.

However, more drastic approaches are being taken by some to cover their child's university costs. 6% of parents are considering taking out a bank loan to raise the necessary funds, while the same percentage are planning to remortgage their house.

These findings could prompt fears that some parents trying to reduce the impact of student debt on their children could end up facing debt problems of their own - particularly in the current economic climate.

AIC's research follows plans to increase university tuition fees to a maximum of £9,000 in 2012.