Your child isn’t a baby any longer; he or she has packed a pot noodle and a selection of too large hoodies in anticipation of their very first forays in to the Big Wide World. AKA University. But just because they’re moving in to halls doesn’t mean they won’t need your help, especially when it comes to finances. With research showing that putting a student through university can cost parents anywhere up to Â£10,000 a year and that the average student leaves a three-year course around Â£12,000 in debt, it’s worth knowing what you’re entitled to and how best to help your budding professor.
The main type of support available to students is the Student Loan. The cheapest way to borrow money, the current rate of interest is just 1.5% with repayments made once earnings reach £15,000. One type of loan is available for tuition fees (a maximum of £3,225) and another to help towards the cost of living. All students are eligible for the tuition loan and at least partial help with maintenance costs.
Maintenance grants of up to £2,906 and bursaries are also available for certain students, however it is often difficult for those students under 25 or financially assisted by their parents to qualify for additional non-repayable funding. For example the maintenance grant will only be paid to children from households earning less than £25,000 per annum, hardly enough for a couple to live on let alone send a student through university with.
With so little available to help with day to day living, as many as 30% of students now choose to live at home, whether this is their preference or not. If your own child chooses this option it may help to set ground rules about staying out late, having friends to visit or doing laundry.
Boundaries should also be set when it comes to finances. Now is the time for kids to learn the value of money. Set a monthly limit and stick to it – as harsh as it may seem to say no, your teen needs to learn that they can’t be bailed out every time they budget badly. The bad money habits learnt now will last for life so encourage young adults to be responsible for their cashflow and perhaps those pleading phone calls might stop by the time they’re 30.
If you do choose to pay rent or bills for your son or daughter it is often wise to pay directly to the landlord or energy provider to avoid funds being ‘inadvertently’ redirected to the Student Union, leaving your or your child in a financial crisis.
Finally remember not to feel pressured in to paying more than you can afford, set a budget for living costs, not luxuries and be sure that you have investigated www.direct.gov.uk to find out exactly what your child is entitled to receive from the government.