Yet for those left to carry the financial burden of a degree on their own shoulders, the real cost is likely to be significantly higher once years of servicing interest charges are taken into account. Government statistics suggest around 70 per cent of students who started university last year will end up repaying between £65,000 and £85,000.
Given these stomach-churning costs, it really does make sense to plan ahead and start accumulating a fund for your children at the earliest opportunity, whether you aspire for them to enter higher education at some point or simply want to help them get a foot on the housing ladder.
In this respect, a Junior ISA is a useful tool, enabling you to invest in stocks, shares and cash, with returns accumulated in a tax-efficient wrapper until the child is 18.
However, while tax efficiency is an appealing badge to working adults, what matters most are the overall contributions made and then the choice of investments you make within the plan.
To deal with the former, based on an assumption of achieving an average return of 5 per cent net of charges each year, you would need to invest £1,700 a year for 18 years to generate a pot of approximately £50,000.
However, add in an inflation assumption of, say 3 per cent, and the required sum is going to be more like £2,900 per year.
There is of course a good deal of uncertainty in this assumption, since historically the cost of education has risen faster than general inflation. The key point is that the more you can do and the earlier you start, the better.
1. Don’t hold cash
While cash is an eligible investment for a Junior ISA, frankly it is one of the worst possible places you can save for the long-term.
In addition to the fact that interest rates are currently languishing at record low levels (and are likely to remain there for some time), cash deposits do not grow, so the real value of the pot will progressively decline because of the corrosive impact of inflation.
Unless your child is a couple of years away from needing to access the savings, do not invest in cash or you may find it only ends up being able to fund a very small 18th birthday party.
2. Invest in equities, but realise there’s a risk
One of the cornerstone principles of investing is that there is a relationship between risk, reward and time.
However, there is no guarantee that more risk will lead to more reward, or it wouldn’t be risky.
With a timescale of up to 18 years, a Junior ISA is potentially a very long-term savings scheme and therefore suitable for investment in equities.
3. Diversify through different strategies
With a current yearly allowance of £3,600, compared with an adult ISA allowance of £11,280, the scope for diversifying across multiple individual funds within a Junior ISA is a little more limited.
In any case, many parents would prefer to tuck money away without continually reviewing their choice of investment.
This makes three strategies worth considering for a Junior ISA: passive investments, “one-stop shop” funds and funds focused on long-term growth.
Passives
Passive, or index-tracking funds, are designed to follow rather than beat the market.
They have the benefit of low costs, although these vary widely between different index funds, and you don’t need to worry about whether a fund manager is doing a good job or jumps ship, as they are heavily automated.
Cost is a key consideration for choosing between these and we like the HSBC FTSE All Share Index fund, as it has tiny annual expenses of just 0.27 per cent.
However, the limitation with this approach is that it will not give you exposure to markets such as the US, Asia and Europe and will provide negligible exposure to small, fast-growth companies.
Multi-asset
The second approach is to invest in a "one-stop shop" fund, which is diversified across numerous markets and asset classes, providing a complete portfolio under one roof.
Funds that fit this cap include well regarded multi-manager funds, such as the Jupiter Merlin Growth Portfolio, or shares in diversified investment trusts such as RIT Capital Partners.
RIT, chaired by Lord Rothschild, invests in public markets and private equity, through investments selected in-house and through portfolios farmed out to external experts, including leading hedge funds.
Long-term growth
The third approach is to put short-term caution to one side and to back a long-term theme.
In this respect, we like funds that focus on emerging markets such as Asia, Latin America, eastern Europe and India, which are experiencing significantly higher economic growth rates than the developed world, underpinned by youthful and expanding populations, urbanisation and spreading affluence.
In this area, our favoured fund is First State Global Emerging Market Leaders.
Of course, depending on the amount you are able to invest, it is possible to take a hybrid approach across these strategies, for example by blending an emerging markets fund alongside an index tracker to gain exposure to returns from developed market companies.
For a more in-depth look at these funds, and others for a lower-cost, high-growth or long-term approach, see this weekend’s FE Trustnet ISA coverage.