Advice Column – Are you worried about student debts?
I’m just starting a degree and am worried about amassing debts?
Students who graduate are more likely to have debts due to higher living costs, entertainment and tuition fees. Here is some information to help maximise your income levels and help you to keep your spending under control.
Tuition Fee Loan
English or EU full-time or part-time students can apply for a Tuition Fee Loan. The loan is paid directly to your university or college though you do have to pay it back when you earn over £25,000.
Maintenance Loan for living costs
You must be a full-time or part-time English student. EU students may be eligible for help with living costs if they have lived in the UK for more than 5 years. You may have to give details of your household income and this loan is paid directly into your bank account at the start of term, which again you have to pay back.
Students on a low income may be able to apply for Universal Credit – look at www.gov.uk for more information.
University and college hardship funds:
Contact your university or college to find out if you’re eligible for extra money.
You could get extra money from your university or college if you’re experiencing financial hardship. You may be, for example:
- a student with children, especially single parents
- a mature student with existing financial commitments
- from a low-income family
- a student that was previously in care (a ‘care leaver’)
- homeless or living in a foyer
The amount you can get is decided by your university or college. It’s paid in a lump sum or instalments.
You usually won’t have to pay the money back, but in some cases you’ll get a loan that you have to repay.
Contact the student services department at your university or college – they’ll decide if you qualify.
- a copy of your letter from Student Finance England showing how much student finance you’ll get
- documents about your finances eg bank statements and rent details
Money from your university or college won’t usually be counted as income when working out your entitlement to benefits or tax credits, unless it’s for day-to-day living costs.
Students with children or dependent adults
You can apply for:
- Childcare Grant– full-time students only
- Parents’ Learning Allowance– full-time students only
- Adult Dependants’ Grant– full-time students only
- Income Support and/or Child Tax Credit (if you have 3 or more children)
If you have a disability, long-term health condition, mental health condition or specific learning difficulty (such as dyslexia) you can apply for:
You may also qualify for disability related benefits.
Medical, social work and teacher training students
You can apply for:
- NHS bursariesif you’re studying certain medical, dentistry or healthcare courses
- help with costs of travel to UK clinical placementsif you’re studying a medical, dentistry or healthcare course
- social work bursariesif you’re a social work student
- extra helpif you’re a teacher training student
Bursaries, scholarships and awards
Students in higher education can apply for money directly from their university or college on top of any other student finance – you don’t have to pay this money back.
Each university or college has their own rules about bursaries, scholarships and awards, eg:
- who qualifies
- how much you can get
- how to apply
Funding from charitable trusts
Use the Turn2us grant search to check whether you qualify for funding from a charitable trust.
Student bank accounts
Using overdrafts should be avoided BUT they are source of money and student bank accounts have interest free overdrafts, so you don’t pay to borrow this money (REMEMBER – you will have to pay it back!). Student bank accounts also have offers such as free rail cards.
5 top student overdraft tips
- Get the biggest 0% overdraft – unless huge freebies beat it
- Never go over your overdraft limit
- Beware, you’ll be credit scored – when you apply for debt products, including a bank account with an overdraft, the bank will credit score you to decide how desirable a customer you are based on behavioural predictions from your previous financial data.
- DON’T pick based on the closest branch or ATM – just because there’s a particular bank on campus, or a conveniently-located cash machine nearby, this DOESN’T mean you should choose an account with it. You can withdraw cash free of charge from any bank’s ATM and almost every bank gives online access.
- After uni, switch to a top graduate account
For at least a year after finishing your course you’re still eligible for preferential terms, including 0% interest overdrafts, allowing you to gradually pay off any debt.
Switch to the Top Graduate Account to continue getting the benefits.
Top tips to avoid student debts
Budget – and stick to it!
Everyone needs to budget – doing this keeps you in control of your expenditure and ensures you’re not left without cash. Be realistic when you set your budget and stick to it. You could open a second bank account for “luxury” spending.
It’s important to enjoy yourself at university but you need to budget for it.
Plan when you’re going out and when you’re staying in, no-one can afford (financially or physically) to party every night, so don’t feel pressured into doing it.
Often you will need books for your course reading, but buying these can be expensive. Why not borrow them from the library, share the cost with a friend on the same course or consider subscribing to text books eg https://www.perlego.com/
Don’t get the ‘spend it before it goes’ bug
When the loan cash arrives, resist the temptation to celebrate with a big blow-out. If you must splurge then the time to do it is at the end of term, when you’ve carefully managed your money and know you’ve got some spare. If you see sales remember something’s only really a bargain if you would have bought it anyway.
Use your student card and ask for discounts
Many places will give you a discount if you use your student (or NUS) card. Discounts include highstreet shops, restaurants, cinema, etc!
Get a job
While studying is a priority, many students will also have paid work so if you don’t have enough cash, don’t over borrow, try to find a job instead. The earlier you try to get work in the year the better your chances.
If you are worried about student debts visit your Student Union Officer for advice or if you are in debt visit your local Citizens Advice office.
For more information about financial support and extra help visit: https://www.gov.uk/browse/education/student-finance