5 tips for parents paying for university

Rachael Oku

by , VP Brand and Communications

at PensionBee

15 May 2018 /  

May 2018

5 tips for parents paying for university

If you’ve got kids nearing university age, life is about to get very expensive indeed. From university tuition fees, to student accomodation costs and an endless supply of pot noodles, takeaways and cheap cider – there’s a lot of expenses to cover.

Whether you’ve got a few years to plan or your child’s due to start uni this autumn, there are always things you can do to save and manage your money more efficiently.

How much does university cost?

Long gone are the days of a free education! Unless of course you’re from Scotland and your child studies at a Scottish university, in which case you won’t have to pay a penny. EU students don’t have to pay to study in Scotland either, but if you’re a student from England, Wales or Northern Ireland fees rise to £9,250 a year.

If you’re British and your child studies in England you can be charged up to £9,250 for each year of their degree, while universities in Wales charge home students up to £9,000 and EU and Northern Irish students £3,925.

If you live in Northern Ireland and your child’s applying for university there, fees will be capped at £4,030, but if you live somewhere else in the UK and your child wants to study in Northern Ireland you can expect to pay as much as £9,250.

While students don’t have to pay university tuition fees upfront, thanks to the Tuition Fee Loan scheme, they will need money to pay for student digs and general life expenses during term time, which is where a government Maintenance Loan typically comes in.

According to Times Higher Education, which releases the world university rankings, UK students paid an average of £535 rent a month in 2017. Students living in London spent around £640 a month on accommodation last year.

When you combine the maximum Tuition Fee Loan of £27,750 (over three years) with the cost of accommodation in London for the same period, the total cost of university is around £50,000. If you take the maximum Tuition Fee Loan of £27,750 (over three years) and add it to the highest possible Maintenance Loan of £34,062 (over three years), the student debt your child could rack up totals a whopping £61,812.

If your child is planning to study at a university in England you can use the government’s student finance calculator to get a more accurate idea of how much university will cost your family. You’ll be asked to provide details of their course start date and tuition fees, plus details of your household income.

How to pay for university

Parents paying for university is nothing new, but with rising tuition fees, high costs of living and other expenses to cover back at home, the Bank of Mum and Dad is being stretched like never before.

Here are five things you can do in the run up to your child starting university to help cover the costs:

1. Start saving early

Starting a university fund for your children when they’re a young age will help take the sting out of the cost of sending them to uni when the time comes. A Junior ISA is a tax-free way to put money aside for your child’s future, and grandparents can contribute too. You can save up to £4,260 a year (2018/19) and your child won’t be able to access the money until they turn 18.

If you don’t want to go down the ISA route, you could always put a portion of what you’d spend on each birthday and Christmas present aside, or save a portion of your salary each month, the same way you’d set aside money for your pension. If you get into the habit of doing it you won’t even notice that the money’s missing from your wages.

2. Apply for financial support from the university

Each university will have a range of support services available to new students including bursaries, hardship funds and scholarships. These cash awards aren’t just reserved for students from low socio-economic backgrounds and, depending on the university, you can find funding for disabled students and those from rural communities, for example. Whatever your circumstances, it’s worth doing some research and checking all of the criteria before discounting your child.

3. Apply for government loans, grants and support

To help cover the costs of going to university the government provides two loans to students; the Tuition Fee Loan and the Maintenance Loan.

The Tuition Fee Loan works by paying the cost of your child’s tuition direct to the university. If your child’s going to be a full-time student starting in the 2018/19 academic year, they can apply for a Tuition Fee Loan of up to £9,250. If they’ll be studying full-time, but at a private university or college, the maximum Tuition Fee Loan available is £6,165.

Maintenance Loans are means tested

Maintenance Loans are means tested, which means you’ll have to provide details of your household income. They’re designed for covering living expenses when your child’s at university and are paid directly into their bank account at the start of each term.

If your child’s going to be a full-time student living with you at home in the 2018/19 academic year the maximum Maintenance Loan they can apply for is £7,324. If they’ll be moving out, but not living in London the maximum is £8,700. If they choose to live away from home and in London they can apply for up to £11,354.

Both the Tuition Fee Loan and the Maintenance Loan must be repaid by the student.

Additional support is available for students studying abroad and the government’s student finance calculator can help you determine if there are any extra funding options available, which your child won’t have to repay. You can also find more information on the UCAS,Scholarship Hub, and Scholarship Search websites.

4. Encourage your child to get a part-time job

The best way to teach your children the value of money is to make them earn it. Whether that’s by doing jobs around the house in exchange for pocket money from a young age, or allowing them to get a Saturday job while at still college, you should encourage your child to save a little of whatever In the run up to starting university it’s not uncommon for kids to take on summer jobs so they can save and get a taste of the independence that’s to come.

And, depending on your child’s course and lecture timetable, it might be possible for them to take on a part-time job while studying. If they can work just two or three shifts per week they’ll be able to contribute towards their living expenses and won’t be as heavily reliant on debt, such as a Maintenance Loan or bank overdraft.

5. Budget as a family

It’s important to budget as a family so that your children also learn to manage their money and live on a budget. This will help you save money in the run up to your child starting university and will also help prepare them for managing their finances. If they opt for a Maintenance Loan, they’ll get a payment at the beginning of each term which they’ll need to carefully manage to ensure they have enough for rent, food, travel and leisure for the duration of term.

There are lots of measures you can take to save money in the short-term such as reducing unnecessary spending on things like takeaways, switching things like phone provider and utility suppliers and avoiding these basic money mistakes. There’s also a range of money saving apps that can help even the most hopeless of savers get their spending back on track.

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