A short course in campus survival

Students are getting deeper in debt. Dido Sandler offers a lesson in money management Dido Sandler

SUCCESSFUL A-level candidates will be celebrating on Thursday, when this summer's results are finally released. But for the hundreds of thousands now hoping to take up places in higher education, the real test is yet to come.

Financial survival throughout the course has become arguably a tougher challenge than the studies themselves. Figures from the Committee of Vice- Chancellors and Principals suggest one in 12 gives up his or her course unable to afford carrying on. Often this casualty level is higher than the actual failure rate.

The problem is quite straightforward. The level of finance currently available to students is not enough to live on, and they are getting deeper and deeper in debt. The student grant, or the equivalent parents are expected to provide, plus student loan, was pounds 3,350 in 1994-5 (with an extra sum payable to those studying in London). But annual living costs for students at Manchester's universities amounted to pounds 4,665. In London rents alone absorb most of the grant and loan.

Interest-free overdrafts for students are available from the banks, with a limit of up to pounds 1,000 in the final year. But this will not be enough. Students cannot get by without additional cash.

According to research undertaken by Barclays Bank, parents are dipping deeper into their pockets than ever. An estimated 30 per cent of students are working an average of 12 hours a week, and many more attempt to bail themselves out of debt during the holidays. However, 20 per cent of those looking for work can't find any, and tens of thousands are driven on to emergency Access funding.

The Government allocates pounds 17m in Access funds to the universities, to distribute to cases of extreme hardship, in order to lower the drop-out rate. Needless to say, these funds are getting used up quickly.

The Independent on Sunday contacted leading advisers and asked them for money tips for students.

o Loans from the Student Loan Company are the cheapest you will get. Repayment is demanded only when students leave college, and are earning 85 per cent of the average salary. The interest level is restricted to the rate of inflation, currently 3.5 per cent. Students needing to borrow should apply to the SLC first. Expensive loans, for example credit cards, costing up to 22 per cent, should be avoided.

This year pounds 1,385 is the maximum permitted grant. Students should ask for their grant in three term chunks, to help the budgeting process, and not spend it all at once.

o Those eligible should apply for grants as soon as possible, if they have not already done so. Last year 35 per cent of students were not paid on time, and 10 per cent had to wait over a month.

o Current students should contact the SLC, and prepare an application before the start of term. Freshers will need to wait for the start of term to complete the application. Last year the SLC had severe problems, with more than 30,000 delayed claims that involved unanswered letters and unattended phone calls in the autumn term.

Although the SLC has spent a lot of time and resources to help it cope better this time, it's worth avoiding the rush. Telephone 0800 405010.

o Set up a bank account before you go up to college, then transfer it to a student branch. Shop around for the best deals - examine interest rates and levels of interest-free overdrafts, as well as carrots like free initial cash and travel cards. Never be afraid to talk to your bank's student adviser. Give too much information rather than too little, so the adviser will understand any problems that arise. Unauthorised overdrafts cost around 30 per cent annual interest - give them a wide berth.

o Try to organise a reasonable weekly budget, to control expenditure. Hall fees alone will absorb most of your grant cheque.

o If looking for work, update your CV. Some universities run job clubs to help you look.

o Wait until term starts to buy books. You may be able to get them cheaper second hand, or borrow them from the library.

o If you're not going into hall, try to pay hefty utility company bills monthly to spread the pain. Consider pooling funds for food. Shared meals may save money.