Money Matters

Money Matters

Whatever your background or your parents’ income, money should never be a reason to not go into higher education; anybody who wants to continue learning at university can afford to go. Just as most people who want to buy a house will have to take out a mortgage, so students too will have to borrow money, but it’s not as scary as you might think.
Since the abolition of student grants in 1997, all eligible, full time students are now entitled to a student loan to cover the cost of tuition fees. In addition, many people will qualify for a maintenance loan on top – this is intended to cover the cost of living, travel, food and books and the amount you get is assessed on your parents’ income. For very low income families, there are also maintenance grants – non-repayable sums of up to £2,906 for those from households where annual income is less than £25,000 a year.

Never be worried about taking out a student loan. It is the cheapest and safest loan you will ever be offered, and if having one means that you don’t need to take out higher rate loans like overdrafts and credit cards, then so much the better. Credit cards companies rub their hands together in glee when a student requests one – because students don’t earn much money, they’re unlikely to pay the full balance of the card of each month and that, in terms of the interest paid, makes students very profitable indeed. For a financial safety net it is far better to open a special student bank account with an interest free overdraft, but let me stress again, this should be used as a safety net only: as soon as you graduate you will have to pay that overdraft back.

 On the other hand, you won’t start paying a student loan back until you have left university, are in work and are earning more than £15,000 a year. If, somehow, you never manage to find a job or you never earn more than £15K, you’ll never have to pay the loan back at all. Hopefully though, you won’t be joining the back of the dole queue, so when you do start paying back your loan, it will only be a very small amount each month (about £5 or £6 if you earn the average graduate wage of £18,000 a year). This amount comes straight out of your salary before it even gets to your bank account – think of it as a little extra tax and you’ll barely notice it.

Money is tight when you’re a student, but careful budgeting and banking will see you through. Be realistic about your spending – having an NUS Extra card is great for discounts in Topshop, but do you really need new clothes every week? Could you buy “no frills” products in the supermarket (that taste just as good!) instead of premium brands? Consider getting a part time job to earn some extra spending money if you really can’t do without life’s little luxuries. If you’re sensible about the hours you work, it needn’t impact on your studies, will look great on your CV and can be a lot of fun too!

If you are in real financial strife, there are grants, bursaries and hardship funds that you may be eligible to apply for – talk to the student finance or welfare officer at your university. There is no reason why everybody who wants to study a degree or higher education course can’t do exactly that.
 

Lisa Martin