Counting the cost

If you don't want to end up in too much debt it's vital to get to grips with the financial realities of being a student

A whole new world has dawned on the students of the 21st Century. Gone are the days when people's perception of students was that they lounged around pleading poverty while receiving generous grants and state benefits. The explosion of student numbers in the last 10 years has put such a squeeze on financial resources that when students plead poverty now, they mean it.

A whole new world has dawned on the students of the 21st Century. Gone are the days when people's perception of students was that they lounged around pleading poverty while receiving generous grants and state benefits. The explosion of student numbers in the last 10 years has put such a squeeze on financial resources that when students plead poverty now, they mean it.

The vast majority of students make it through the financial wilderness... just. But it is usually a real struggle. And by the time that studying is over and done with, there's a whopping great debt to banks, the Student Loans Company and parents to start paying back.

But don't let that put you off! When all is said and done, higher education is probably the greatest investment you can make for your future - and if your future is not worth investing in, then what is? But as you (and your parents!) wait nervously for those invaluable university and college offers it's worth starting to get real with money now, before it's too late.

Every student will come from different backgrounds and circumstances, and every one will have different ways of coping with the financial headaches of being a student. But students are facing the same problems and increasingly having to take the same actions to sort themselves out - such as getting part-time work and taking out student loans in order to pay fees, etc.

Take these two hypothetical students as an example. Robin and Carla are both 19, both away from home in a new town, and both started their higher education last autumn. Their answers may not cover all circumstances, but will give you an indication of what's to come...

FeesRobin: "Forms were sent to me via my A-level college from the Local Education Authority in February and March. It was a means test form so I had to get my parents to fill in what their income was, as well as my own - nothing! This form was basically to determine how much of the fees I had to pay.

"Apparently, you pay a contribution to the full fee depending on your family's income. We're not badly off, so I ended up having to pay a little. My richer friends paid the maximum of £1,025, which is going up to £1,050 this year; the poorer ones paid nothing.

"I had to ask my parents to help me out with the cost, which had to be paid at the start of the year - as soon as I turned up and registered at uni."

BanksCarla: "I didn't have an account before I went to college, so I went to see what the banks offered on campus. All the major banks had branches on campus, and during fresher's fair they had big promotions going on to attract the new kids.

"All the banks seemed to be falling over themselves to attract us all. They were all offering interest-free overdrafts - one of them was offering up to £800 - as well all kinds of goodies and sweeteners. Lloyds/TSB was offering a straightforward £40 cash deposit, which seemed a fine idea to me as I came to college with very little money and my loan was not through yet. But the others were offering stuff like mobile phones, pagers, driving lessons, and all offered insurance, commission-free foreign currency, credit cards...

"It was a pretty bewildering choice but my older brother has just graduated and I'd seen that it's very easy to get into debt with the banks, and once you leave they are on your back immediately. I just got an account with one of them and have tried to balance my budget."

LoansRobin: "My parents give me a little money regularly every month, but it's not enough to live on; just to make life a little more comfortable. I had to get a loan. The means test forms also determined how much loan I was entitled to. Everyone gets 75 per cent of the full amount - and I ended up with another 15 per cent after the means test.

"The amount I could get in my first year was £3,885, and this goes up every year. I have never had access to that much cash before, and it kind of went to my head! Fortunately, I didn't get the whole amount in one go - it was split into three payments at the start of each term. I went mad with the money in the first few weeks though. There were loads of nights out at the union and in town... just getting to know people.

"But I seriously ran out of money before the end of term and had to negotiate an extension to my overdraft with the bank manager to see me through. I'm now playing catch-up with my money - nowhere near as many nights out now!"

JobsCarla: "I couldn't survive on just the loan, even though I got the full amount. I had to get a job - as have most of the people I have become friends with. It was daunting to begin with. I was in a new town where I didn't know anyone. Apart from bits and pieces here and there during holidays I didn't have much work experience.

"But with so many students needing work, the university I'm at has got a Job Shop on campus. It's like a normal job centre, but designed specifically for students. They list jobs in offices and stuff related to your degrees so you can earn money as well as gain useful career experience.

"I don't really know what I want to do when I graduate, so I'm just doing office work for a company in town - about 12 hours a week. The money isn't great but it makes the difference, and they're prepared to fit my hours around lectures. It also beats bar work or a burger bar, which some of my mates have ended up doing!"

'Which Way Finance' is full of advice for parents and students on dealing with the financial perils of higher education. If you want more information then you can contact the writers by email, or the UCAS enquiries team - a very helpful bunch! - on 01242 227788. Or ask the National Union of Students, or your school or college. The thing to remember is to make a plan and stick to it, and to start planning now.

c.brown@independent.co.uk