Some Year 12 pupils (or Lower Sixth formers) are already thinking about open days at university and perhaps preparing their personal statement for applications. Of course, all mums would want their kids to have the chance of higher education. But are they thinking about their child graduating with £50,000 of debt?
The eye-watering cost is enough to make anyone think twice about a degree. Out of those determined to study, many will rely on student loans to cover it, especially as these are only repayable once students are earning over a certain threshold after their course. But other debts can really mount up during the course. And it’s here that parents can help.
1. It’s living costs – not student debt – that causes hardship
Student loans divide into those for tuition and those for maintenance. The problem for many students isn’t just expensive student housing (£565 a month on average), but that the maintenance loan doesn’t always cover it. And that’s before food and any other basics. No wonder eight out 10 students are permanently stressed about money. So, how can parents help?
• Sit down together and draw up a list of monthly costs: rent, bills, food, transport, social life, subscriptions and anything else you can think of.
• How much income will your child have? Don’t forget you may be eligible for non-repayable funds (scholarships, bursaries and grants) from universities, councils, recruiters and charities, as well as having wages or parental contributions.
• Not enough cash to cover costs? Living at home can save thousands on paying rent, for instance, so if it works for your family it’s worth considering. Go through each cost in the same way and see if there are cheaper alternatives.
2. Tackling parental contribution is tricky
How much students can borrow in maintenance loans is tied to household income: for most students, that’s how much their parents earn. In fact, once household income hits £25,000, family finances are expected to cover the difference (this calculator reveals by how much).
Not all families can afford top-ups and many students feel guilty about asking. Either way, it’s worth having a candid conversation about money sooner rather than later. Can you afford to, or are you willing, to help? Where will the extra cash come from if not? Even if you can’t chip in, being available to talk about problems can be a major help for struggling students.
3. Teach or talk about money more
With three-quarters of students wishing they’d learned money skills before university, this is the best (free!) thing parents can do to help before students get to the dreaming spires.
The suggestions above can get you talking about costs and tackling problems together. Showing how you handle the family budget is also useful learning, such as how to live within your means, prioritising essential costs, saving and investing, shopping around to pay less and getting help when you run into difficulties.
Coping with the costs of going to university isn’t always easy but knowing the potential pitfalls means you’re more equipped to handle problems when they arise. A good plan is half the battle!