Money management

Going to university

A university education is expensive – and it is getting pricier all the time. Recent figures show that students can expect to accumulate more than £5,000 of debt for each year of study and that most people starting uni in 2009 should expect to leave owing up to £23,500*.

Students should budget for:

Tuition fees for each year of study – capped at £3,225 for 2009/2010
Rent
Household bills
Council tax (unless you are in student-only accommodation)
Mobile phone
Travel
Books, stationery, photocopying
Equipment
Field trips
Food and drink
Laundry
Clothing
Going out
Insurance
Interest and/or loan repayments

It takes concentrated work to keep that burden of debt as light as possible. These Tips for parents and Tips for students should help.

* The Push Student Debt Survey 2009, www.push.co.uk

Tips for parents

The earlier you start preparing for your child going to college, the easier it will be – it is never too soon to begin saving.
Visit an independent financial adviser to find out what your options are – you may be able to give the rest of your finances an overhaul while you’re about it.
Consider setting up a trust fund, which you will not be able to dip into, starting off with the government grant received by all children born since 1 September 2002. Find out more at www.childtrustfund.gov.uk.
Encourage your child to start saving his or her own money towards college. You could provide an incentive by matching their savings.
You can slash accommodation costs if your child becomes a stay-at-home student. This is becoming such an attractive proposition that an estimated 25 per cent of students are rejecting digs in favour of their own bedroom.
Ensure that under-graduates who do decide to study away from home know how to cook and budget before they go – a 2008 National Union of Students survey reckons that students typically underestimate their day-to-day expenditure by at least ten per cent.
Your student-to-be will need a bank account and debit card – and understand how to use them properly.

Tips for students

Not all student bank accounts are the same. Do your research and find the one that suits your needs best rather than just going for the one with the most seductive introductory offer. A price comparison site will make things easier but remember to check all the fees and charges before signing up.
Money borrowed from the Student Loans Company is not free but you will be charged a lower rate of interest than a commercial lender can offer. Students in England can currently borrow full tuition fees plus up to £4,950 a year maintenance, or a little more if you are living in London. In Scotland, tuition fees might be paid for you and the maximum student loan is £4,625 a year. See www.student-support-saas.gov.uk for more information.
Interest starts to rack up on your student loan as soon as you graduate and repayments will automatically be deducted from your pay as soon as your gross earnings reach £15,000 a year or £1,250 a month. Nine per cent of anything you earn above this threshold will go towards repayments – so the less you spend at university, the easier you will find it to get established as a graduate.
If you need to take out a loan or apply for a credit card, use price comparison sites to find the best deal and always check the small print. You may have to get your parents to act as guarantors, so be certain that you can repay what you owe, or they will end up saddled with your debts. They might also have to guarantee your bank account.
Only borrow the minimum you need to survive, not the maximum you can get away with. You will have to pay it back one day.
Check online or with your university what bursaries and scholarships you might be able to apply for. According to scholarship-search.org.uk, more than £250 million is available in this kind of help each year yet a considerable amount is not taken up.
Look out for a part-time job that you can fit around your studies. Cleaning and bar work are favourites.
If you (or your parents) are on a low income, you may be eligible for a maintenance or special support grant – 40 per cent of students receive non-repayable allowances, according to the government. A full maintenance grant for 2010-2011 in England and Wales is £2,906.
Extra help may be available if you are disabled, have a specific learning difficulty or mental health disorder, or look after a dependant adult or child. People on a low income who get into financial difficulty may also be able to get support through The Access to Learning Fund. Find out more at www.direct.gov.uk.
Income support and housing benefits are available to a small number of students, including single mothers and some disabled people. Check online or with your benefits office.
Collect discount vouchers, keep an eye out for special offers and sign up for loyalty schemes – it all helps.
If you find yourself struggling financially, do not ignore it in the hope that something will come up – talk to someone. The Student Union or your local Citizens Advice is a good place to start. You will find contact details on the internet.