Students are gearing up for A-level results this week and will soon turn their attention to setting off for university.
Sending a child off to university can be an exciting time but it can also be tough on their wallet – or yours.
For many students, it will be the first time they are living alone and in charge of their own money, bringing more financial responsibility.
The beers in the student bar may be cheap, bur other living costs can quickly add up, especially as tuition fees are rising this year.
The average graduate now leaves uni saddled with a whopping £53,000 in student loan debt, and that’s before you throw in university balls, booze and books. Here are the university costs to prepare for – and importantly, how to budget for them.
How tuition fees work
Tuition fees are rising from this September by £285 to a maximum of £9,535 a year.
That’s £28,605 to budget for over the next three years at least, based on the typical three-year course length.
Most students in England can get a tuition fee loan to cover the full cost of their course, which is paid directly to the university.
There are also maintenance loans that provide money directly to the student to cover items such as rent, food and other bills.
Unlike tuition fee loans, the amount of maintenance support available depends on where the student lives and their parents’ income.
Daniel Woodhouse, head of external relations at financial guidance website Money Wellness, warns that many students from lower-income families are unaware of extra help such as bursaries, scholarships and hardship funds worth £1,000 to £4,250 that don’t need to be paid back.
You can find out if you are eligible for a student loan and other support on the Student Finance website. There are also charitable grants available through organisations such as Turn2us or The Scholarship Hub.
The student loan doesn’t have to start being paid back until the April after a student graduates and only once they earn above £26,065 a year. An interest rate of 4.3 per cent is currently charged on loans.
Learn to budget at university
It can be tempting to splash the cash at university, especially when that maintenance loan first comes in and student discounts start calling.
But it is important that students learn to budget to avoid being on baked beans until Christmas.
Aileen Robertson, head of savings at Atom bank, said: “Working out a budget at the start of each month means you can figure out how much your essentials, such as rent, bills, food and travel, will cost.
“A student will then get a clear picture of how much disposable income they have to play with.”
Don’t rush into buying university essentials. Tom Allingham of SaveTheStudent explains that students could end up moving into halls with 10 people who all bring a set of pots and pans. SavetheStudent has a useful list of what to take to university.
Discounts, trackers and apps
Keep an eye out for student discounts that can reduce the cost of everyday essentials, takeaways and activities such as cinema tickets.
Discounts are listed on websites such as UniDays and Student Beans, while SaveTheStudent also has a student discount directory.
Student railcards are a great option for those regularly taking trains as tickets are discounted, although a coach can often be cheaper and you can save even more if you have a National Express Coachcard.
Allingham highlights that back to uni sales don’t usually start until September so there is no rush to start buying supplies and that is also when new undergraduates can start using their student discount.
Price comparison and tracker sites such as CamelCamelCamel and Idealo can help monitor prices and spot a good deal.
Students don’t have to buy everything new and could find bargain clothes, electronics and even textbooks on resale websites such as Vinted, Gumtree, eBay or Facebook Marketplace.
Banking apps can also help. Starling Bank has a budget planner as well as a round-ups feature that helps users save money by rounding up their spending and putting the extra cash aside. Monzo users can also roundup their spending and there is a trends tool to highlight money habits.
Savvy students can use cashback sites such as TopCashback to get money back on their spending.
There are other steps that students can take to boost their finances beyond apps. Simon Phillips, managing director at No1 Currency, suggests holding onto cash rather than cards.
He said: “Mobile and card payments are designed to be effortless. But on a night out, that ease can be a liability – it makes it too easy to overspend.”
When not studying, students could of course get a part-time job to earn some extra income.
The best student bank accounts
A range of providers offer student bank accounts that offer perks such as cashback and vouchers that can be better value than a traditional bank account. Check which perks suit your circumstances best before deciding.
Lloyds Bank is currently offering £100 cashback and six months of Deliveroo Plus, perfect for hungry students.
Nationwide offers £100 cashback plus £120 Just Eat vouchers, while Barclays throws in Apple TV if users sign up for Blue Rewards (£5 a month).
Santander is a great option for students far from home as its account comes with a four-year student railcard for discounted travel.
TSB pays a market-leading 5 per cent interest rate on cash, according to Moneyfacts, while students can get interest-free overdrafts of up to £2,000 with NatWest and RBS.
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