Between expensive housing and a long schedule of lectures, college costs add up — and quickly. Investing in the future is exciting, but it can also be daunting.
Whether a student is planning to take out student loans to fund their education or is relying on Mom and Dad’s bank for a helping hand, there is a lot of information to consider. Not sure where to start? We have summarized the most important tips for financing your studies – for parents and students.
The final result
UK universities can charge up to £9,250 in tuition fees – although some charge less, so make sure you check. Cost of living depends on location; Most universities provide an estimate of what students will need.
A student finance loan is your friend
All UK students are eligible for student finance loans for the full amount of tuition fees, but maintenance loans depend on household income, location and length of study. The calculator at gov.uk/student-finance-calculator will help you work out what you are entitled to. However, in general, the higher your family’s household income, the lower the amount they will receive. If a student studies in London, their maintenance loan is also higher.
It is important to note that student debt does not affect a student’s creditworthiness and is erased after 30 years (assuming the government, in power by then, does not change the terms in the meantime). Your child only has to pay back a percentage of what they earn over a certain threshold. So if you’re unsure if he’ll earn well for most of his career, a loan could save you both money.
For more information go to gov.uk/repaying-your-student-loan.
Student funding is the primary source of university funding, but there is a whole world of grants and fellowships out there. “There are also thousands of overlooked scholarships offered each year by universities, private companies and charities. Unlike loans, most of these funds do not have to be repaid,” says Dr. Dominique Thompson, youth mental health expert.
Scholarships are often awarded to those demonstrating academic excellence with strong A-level results, or to those suited to extracurricular work such as musical or athletic ability. Charities sometimes offer scholarships and grants to needy students or those with special personal circumstances. Students can also receive financial aid from the industry they wish to enter, sometimes on the condition that they accept a position with the company that offered the funding for a specified period of time. Finally, there are marketing grants that students can pay to promote products on campus.
Surprisingly, many scholarships and grants remain largely unknown and do not attract enough applicants, so the numbers are stacked in favor of those who apply.
Check out the Scholarship Hub: thescholarshiphub.org.uk.
Decide what you can give
Despite all the support available, many students still turn to their families for help. Sit down with your child, work out a budget and discuss how you could contribute.
Teach them the basics
University may be your child’s first time managing their own money. Take your kid to a grocery store, practice a few simple recipes at home, let them pay their own phone bill for a while to give them an idea of how much things cost.
Don’t worry about student debt
Remember, no amount of student debt will stop you from taking out another loan, credit card, or mortgage after you graduate. You will never be asked to pay back more than you can. Most graduates don’t even realize that the student loan comes out of their paycheck each month.
Talk to your university
“Universities have been allocated funds for student emergencies and mental health support. Search your university’s website for “tuition funding,” says Dr. Thompson. Your department head may also be able to advise you on specific scholarships that are available as part of your degree.
Go to the job board
If you plan to work part-time, get your resume ready when you transfer to university. “Working part-time will help balance finances right now and will also help with future job prospects,” says Adam Bullock, UK director of money-saving website TopCashback. “With a plethora of sites geared towards remote work, job opportunities are no longer confined to a college town.”
Also keep an eye on the positions offered by the university itself, these are often designed to fit seamlessly into your studies and if you are already on campus you will not have to pay for travel.
Don’t wing it – budget
One way to relieve financial stress is to figure out your income and expenses, and hey, you have a budget. Experts at student discount website Student Beans suggest adopting the 50/30/20 rule as an easy way to budget money — 50 percent of your income should go on essentials, 30 percent on leisure, and 20 percent on savings.
When looking for a student account, don’t let shopping coupons and freebies distract you. “Check what each bank offers and decide if it’s right for you,” says Anthony Morrow, co-founder of financial advisory service OpenMoney. “While an interest-free bank overdraft is a great idea, remember it’s not free money. You must have a repayment plan.”
Bullock suggests downloading banking apps like Splitwise, Monzo and Yolt, which allow students to manage bills and see exactly what they’re spending on, leaving little room for overspending. “Budget at the university paves the way to a financially stable future.”