Student Finance Guide

According to data from National Statistics and The Times Higher Education Supplement, students now make up around 4% of the total UK population, making them a significant market. The UK population is also aging, as a result of a decline in fertility rates and the mortality rate (people are living longer and healthier). According to money education charity Credit Action, the vast majority of students are going to end up in debt, whilst according to 2004 Natwest Student Money Matters, graduates will now leave university with debts of almost £13,000.
These are significant figures, but with a little financial planning, they can be put into context.
If you (or your child) are about to start university, here are a few factors to bear in mind before departure:
Assume you will accumulate a certain amount of debt over your period of study, but don’t unduly worry about it.
If you can, take a gap year or some time out to earn money before going to university and where possible obtain a job that may have some relevance to your course
It helps if you take on a part time job at university, though this isn’t meant to distract from the studying. There are a number of employers who provide jobs for students, including universities. Many universities have schemes where students can volunteer (and get paid) as ambassadors, lab assistants, campus helpers and mentors: a part-time job doesn’t have to be off-campus
If you have to borrow , make sure you always establish the cheapest forms of credit available such as interest free overdrafts and student loans. However, remember to check your contracts when you graduate, it doesn’t take long for the Student Loans Company or your bank to start claiming back what was free money at university.
Don’t take out a credit card, you’re a student remember? That iPod and summer ball dress can wait! Keep it simple with a current account, savings accounts and your student loans. If you really find yourself considering taking out a credit card, seek advice before doing so and ensure you know when you can pay it back. As a student, credit cards should always be your last resort.
Budget if you can, and if nothing else avoid paying for everything on plastic (especially credit cards), you’ll keep better track of your spending by using cash and checking your balance regularly. Check your current account over the internet with online banking
Don’t just budget on the essential – rent, food, bills and books. The costs of those coffees between lectures will mount up, not to mention text (mobile phone) costs, printing, transport prices, gym subscriptions and membership fees to student clubs and societies
Do your financial homework online with moneynet, have you got the best current account and savings account?
Shop around for your insurance; moneynet can help you here too. Students are frequent victims of crime, not just with theft between students, but the anonymity of campus life means that wallets, laptops and mobile phones are easy to steal and if they’re not insured, you will lose the value of the stolen item and may have to pay for any damage incurred
Student grants, in the mainstream, were phased out many years ago, but there may be grants, hardship funds and bursaries available to specific courses and individuals. Do your homework in advance and don’t make assumptions.
Know what you want from your course and time in higher education, your finances and studies will benefit from a sense of purpose. There is nothing worse than graduating from university with debt and a minimal idea of where to move next, especially when those debts are being claimed back.
Invisible savings
OK, so there’s nothing like re-discovering a ten-pound note in your pocket, which you’d forgotten about, but below are a few tips which could contribute to finding a few extra quid each year at university.
Insurance: check out the different insurance options on moneynet to get your best quote. Household, motor and travel insurance will be likely considerations at some point during your course and you will find quotes vary considerably, so look at the different choices available.
Exploit your student card where possible and always investigate whether a company offers a student rate or student discount
Bulk buy and divide the cost between your flatmates
If you have to have a mobile phone, are you sure you have the best deal?
Do you pay the bills in your household? A quick search on moneynet will reveal whether you are with the cheapest supplier for you domestic bills, though remember to check with your landlord before changing suppliers
Savings
Stretch your student loans and birthday / Christmas cash gifts out as long as possible. Open up a savings account that would you give you reasonable access to your funds, whilst providing a higher rate of interest than you may get in a current account. If you have saved significant funds, which you believe you won’t need access to in the intermediate term, consider low risk options such as ISAs. Certain ISAs will also allow immediate access to funds and still give high rates of interest, so review the different options.
Dos and don’ts of student finance
Don’t lend money to other students, you may not get it back
Don’t borrow money from other students, if you have to borrow then you can’t afford it
Don’t give anyone else access to your PIN number, you will not be covered for missing funds
Be careful when putting your name on the gas, electricity or phone bill in a shared house. Draw up an agreement and if you doubt anyone’s commitment to pay then don’t share the bills. Standing orders are useful in a shared house, as financial contributions go automatically and directly to the bill-payer and they provide a form of commitment from all parties concerned
Look beyond freshers’ week when it comes to spending your student loan
There will always be students with more money than you, be philosophical about this and don’t try to keep up with unrealistic spending habits. If you have to borrow money for ‘good times’, remember it is your name on the credit card, your name on the overdraft and your credit record. Financial mistakes made when you’re a student may come back to haunt you in graduation