Where does all the money go?

Is all this debt worth a degree? The resounding answer from most students is yes

With the abolition of the maintenance grant and the introduction of tuition fees the full financial burden of studying in higher education now rests on the shoulders of each individual student. Parents contribute as much as they can, but in many cases students have to fund their own way through college, and it is an unfortunate fact that obtaining a degree now also means obtaining a hefty debt.

With the abolition of the maintenance grant and the introduction of tuition fees the full financial burden of studying in higher education now rests on the shoulders of each individual student. Parents contribute as much as they can, but in many cases students have to fund their own way through college, and it is an unfortunate fact that obtaining a degree now also means obtaining a hefty debt.

The NUS estimates that the average student expenditure for the academic year 2000/2001 is £7,686 for a student living inside London and £6,318 for a student living outside London, and even with their student loan, parental contribution and sizeable overdraft, most students end up thousands of pounds in arrears.

But where does all the money go? The maximum tuition fee for 2000/2001 is £1,025, but the biggest expense of all is paying for somewhere to live. The NUS estimates that nearly 80 per cent of a student's weekly income is spent on accommodation and the costs often rise in the second year when students move out of their halls of residence into private digs. The cost of renting varies from £30-£70 per week, depending on where you live.

Once you've found somewhere to live there are bills to pay: gas, electricity, phone, water rates and insurance. And then, of course, you need to pay for general living expenses and, most importantly, food. The NUS estimates that students living inside London will spend £1,266 in an academic year on food and household goods, and students outside London will spend £1,064.

Lucy Collins is president of the students union at Bristol University. She says: "Being at university is very expensive. You want to go out a lot but that costs a lot and you don't really appreciate how much things cost until you start buying food, washing powder and household goods that you've never really thought about before."

Some students are better than others at budgeting. Leon McQuaid, 21, is entering his third year at Newcastle University where he is studying for a degree in mathematics. He estimates that he spends £25-£30 a week on bills, travel, food and books. His accommodation last year cost £44 a week. He generally manages to keep within his budget but if he spends too much and is skint he goes to a friend's house "and they feed me that night".

"It's not too bad", he says, "because at least we are all in the same situation and we are like one big family; everyone looks after each other."

The main source of income for students is the student loan, which is administered by the Student Loans Company. The potential loan for a student living inside London is £4,590; for a student outside London it is £3,725 and for a student living in the parental home it is £2,950. You can also apply to your Local Education Authority for help with the tuition fee.

If your parents combined income is less than £17,805 they won't have to contribute but if they earn more, as Kerrie Leaver, at the StudentUK website advises, "be prepared to honour your washing-up debt because your parents will be asked to contribute".

There are also supplementary grants for students in difficult circumstances. These are known as access funds and hardship loans.

Most students have to supplement their loans with part-time work and holiday jobs. Working for the students union is also popular. As Leon McQuaid says: "I work for the union entertainments, delivering fliers to people about music events. I don't get paid much but I do get in free to see bands at the union, so instead of earning I'm not spending."

If you've got your loan, your parents are forking out as much they can, you're working in a bar once a week, and the food cupboard is still empty, it is time to get a personal overdraft. Check out what the banks are offering and, as Suzanne Allott says: "Choose your bank carefully, look at what size overdraft is being offered and what the charges are, rather than the number of freebies. Remember, you may be with the bank for a very long time paying off your debts."

As far as budgeting is concerned, the main thing is not to go on a crazy spending spree in the first term, as Lucy Collins says: "Do budget sheets to keep track of your spending and always ask for help if things start getting out of control. Go to your welfare officer if you have any problems."

But is it worth getting into all this debt just for a degree? The resounding answer from the majority of students is yes.

As Leon McQuaid says: "I really enjoy being at university and I've made lots of brilliant friends. I'm not from a rich background but I have survived and my debts don't bother me because I'm working now to have a better future."