Insurance for college drop outs

The student funding system is under review

The high cost of putting young people through university is prompting some parents to take out insurance against students dropping out.

Many students are leaving university with debts in excess of £10,000 - and if students leave university without graduating, this money will be lost.

As such insurance companies are offering policies which protect parents against the financial losses of students failing to complete courses.

This would cover unforeseen events such as sickness, accidents or failure in exams.

Harry Rayner, from Wrotham in Kent, said he took out insurance for his two daughters as a protection against the cost of repaying student loans if they did not complete their courses.

"The financing from the parents' point of view is much greater now.

"When I was doing my higher education the government gave grants, but these days students are mostly financed by their parents," said Mr Rayner.

Reviewing funding

"It is the parents we are trying to protect because if things don't work out, they usually end up picking up the bill," said a spokesperson for Saxon Insurance, which offers the cover.

The government is currently reviewing the way that students are funded through university.

The system of student loans, subsidies and tuition fees is to be overhauled, with a report expected from the government in the autumn.