Which Way: Fiscal focus

Don't watch your debt mount - keep it at bay

For most students, money will be a dominant theme of their university or college years. For many, there won't be enough of it and the vast majority will have to take paid work, at least some of the time, to make sure they don't graduate with a mountain of debt.

So, what will it cost you to be a student? It depends on your circumstances. If you live at home while studying, and your parents have the desire and the finances to let you live rent-free with all meals provided, then not a lot. If you are living away from home and going to university or college in London ­ the most expensive place to be in the UK ­ it's going to cost a lot.

OUTGOING

Living away from home... but not in London

Average estimated expenditure for the current academic year for a student who has to pay the full tuition fee is £8,584.

This figure covers fees, books, equipment, travel, rent, utility bills, food, household goods, insurance, clothes and leisure. It represents costs during the academic year only i.e. 39 weeks.

...and living in London, while away from home

The average estimate for the same costs is £10,186.

That sounds like a lot

These figures are based on estimates made by the National Union of Students and are averages. Certain parts of the country are cheaper to be in because rents are lower, for example. As a broad rule of thumb, the further you get away from London, the cheaper it gets, although big cities are always more expensive than out of the way areas.

Most universities and colleges will come up with lower living cost estimates than the NUS ones.

Tuition fees (England, Wales and Northern Ireland)

For higher education courses starting from this September, the most you will be expected to find in tuition fees is £1,175.

Students coming from lower income households receive government help with fees.

In 2005/06 those with a household income of:

* Up to £22,010, will have all of their fees paid

* Between £22,010 and £32,744, will get some help with tuition fees

* Over £32,745, will be asked to pay the maximum fee of £1,175

Tuition fees (England, Wales and Northern Ireland)

Scottish students do not pay tuition fees.

INCOMING

Loans

The maximum loan amount you can get to help with living costs in 2005/06 is:

* £4,195 for students living away from home

* £5,175 for students in London, who are living away from home

* £3,320 for students living at home

In Scotland, an additional loan of up to £545 is available for students from families with an income of up to £19,730.

Can everyone have a loan?

Seventy-five per cent of the maximum loan is available to all eligible students regardless of any other income they have. Whether you can get any, or all, of the remaining 25 per cent depends on your income and that of your family. This will be assessed by your local education authority.

And repayments?

Repayments of loans start in the April after you leave higher education, but only once you start earning in excess of £15,000. Repayments depend on the amount you earn, not the amount you borrowed. For instance, if your income was £20,000 you would repay £37.50 per month.

Higher education grant

Students entering higher education in 2005 may be eligible for the higher education grant, which is worth up to £1,000 a year. The amount you receive depends on your income and the income of your family. An extra £500 is available in Wales, subject to income.

This non-repayable annual grant is to help with the costs of living and studying. The amount of help you get will be assessed on your or your household income.

If this income is:

* £15,580 or less, you will be entitled to the full amount of grant

* Between £15,580 and £21,565, you will receive a partial grant

* Over £21,565, you will not receive a grant

Scotland young student bursary

A means-tested, non-repayable grant of up to £2,395 a year, which is taken instead of part of the loan, so it reduces the amount of loan you need. Available whether you live with your parents or away from home during term time. The maximum bursary will be paid to you if your family income is under £17,500 a year. The amount of bursary will taper down to zero if your family income is around £31,000 a year.

Scholarships and sponsorships

Some universities and colleges offer scholarships to encourage able students to go there. You may well have come across some of them while you were deciding which courses to apply for.

Sponsorships can be very rewarding financially, and are usually offered by sections of industry or the armed forces as inducements for students to consider particular industries or services as career possibilities.

Charities and trusts

If you come from a financially disadvantaged background, you may be able to get some help from local trusts and charities. Your local library should have a copy of the Educational Grants Directory.

BUDGETING

This is so easy to do yet so easy to get wrong. All you have to do is add up what is coming into your bank account. Include everything:

* Student loan
* Any grant or bursary money
* Income from part-time job
* Any money your family is able to give you
* Investment income (if you are really lucky!)
* Money from part-time job or vacation earnings

And then add up all your fixed costs. Include everything:

* Fees
* Rent
* Insurance
* Travel (to and from uni or college)
* Car (if you are lucky enough to have one)
* Credit card payments (if you are unlucky enough to have them)

Then you can see how much you have left over (you do have some left over, don't you?) to pay for non-fixed costs like:

* Course books
* Course equipment
* Leisure travel
* Utility bills (such as electricity and gas, if you have to pay them)
* Food
* Household goods
* Clothes
* Leisure

If there is a gap (and for most students there will be), don't plug it by using a credit card because that is the route to mega debt. Instead, look carefully to see where you can economise, and if you can't, see whether you can up the hours in your part-time job. Be warned though: anything over 15 hours a week and your job may start to impinge on your grades. If you run into real financial trouble, contact your student union welfare counsellor or the finance office of your university or college. Many institutions have hardship funds to help students who fall on really hard times.