Issues, tips and priorities

Working out what financial support is available

Many parents worry about the cost of their child’s higher education but there’s no need for you to get into financial difficulties. What’s available today varies slightly from country to country within the UK, but broadly there are three official sources of financial support you can turn to:

• student loans – to cover all your child’s tuition fees (if applicable) and possibly some of their living costs
• maintenance grants or bursaries provided by the government
• the bursaries provided by the universities or colleges themselves

The good news? The amount of help available can be considerable. See our student budget planner and sources of help for the websites to go to.

Good debt and bad debt

You do hear horror stories about the amount of debt students get into. But it’s worth being clear: there’s good debt and there’s bad debt.

Student loans are specially designed to ensure that they don’t cause your son or daughter financial hardship. The rate of interest is pinned to the rate of inflation and the student doesn’t have to start paying the loan back until they’re earning over £15,000 and then only at a moderate rate. That’s good debt.

Bad debt for a student would be borrowing money, for example, on a credit card where they can only afford to make minimal repayments and the interest rate is comparatively high. That sort of debt can rapidly turn into a huge financial headache.

Introducing them to budgeting

At some point before you wave them goodbye on their first day at university, your child is going to have to know exactly what they can spend each week. What’s already spoken for in terms of rent, bills and any other fixed costs and what’s left over for them to feed themselves. Our simple student budget planner should help them work this out.

The little things parents do

There are some ways in which you can help your children that they’ll hardly notice but will still make a big difference. For example:

• supplying a few of the basics (tea, coffee, cake) at the beginning of each term
• letting them have your supermarket loyalty reward vouchers
• providing book tokens for all that reading they’ve got to do.

Somewhere to live

• what their university or college provides
• what kind of privately rented accommodation is available nearby
• what your child wants.

While some universities offer their students live-in accommodation for all three years, some students actually prefer to live out. Start with what your child’s chosen university provides, they may also hold information on suitable privately rented student accommodation. Some universities provide meals as well as accommodation and whether to go down that route or opt for self-catering is another factor to consider.

Work – one way they can supplement their income

Many students top up their income either with a part time job or by taking on holiday work. Remember they can earn up to their personal allowance (£5,435 in the 2008/9 tax year) without having to pay any tax, though they need to ask their employer for the form P38(S) to ensure they are paid tax-free. There’s obviously a common sense balance to strike here with their academic work.

Work experience placements are also valuable not only because they provide income but also because they can provide useful contacts and expertise as well as helping your child identify what they’ll do after university.