Going to university is a big life transition. From money worries, to academic and social concerns, there’s a lot for new students to think about. It may be particularly daunting for those who start during the Covid-19 pandemic.
Having a good understanding of money management can make it easier, but young people often don’t have enough experience in this area. What can families do to help? Here’s what you need to know about student finance, before the children head off.
There is an unofficial parental contribution written into student maintenance loans
For British students, the amount parents or guardians earn has already been quietly written into student finance. Meaning that the sum of money your son or daughter gets as a student maintenance loan for living costs will depend on your family income.
The amount also varies depending on which country in the UK you live in and whether your child will live at home. For example, the full amount granted as a loan to certain students in England is £12,382 (2021 - 2022). To find out how much your child will be offered, if you’re from England, take a look at the Government’s student finance calculator. The calculator page also has links through to finances for Wales, Scotland and Northern Ireland.
Note that the household income used for the assessments is from the previous financial year. However, if you have suffered significant long-term loss in earnings since then - such as due to Covid-19 restrictions - you can request for the assessment to be made using your current year income.
Don’t panic if you’re not able to top up your children’s funds. “The most important thing is to have an open and honest discussion with your child about what you can or can’t contribute, so you both know how much needs to be made up from elsewhere,” says Tom Allingham, head of editorial at Save the Student. Money may be topped up via bursaries or scholarships, or through part-time work, he adds.
Help your son or daughter to set a budget
The student loan has to stretch until the end of term and so a budget is essential. Many students have little experience creating spending plans, so it can be useful for more financially experienced adults to help.
“We sat down [together] and tried to work it out,” says Ann Bowman, whose eldest daughter attended St Andrews University, while her youngest went to the London School of Economics. “Some things like transport costs were hard to calculate until they were there,” she says. “But we tried to work out a budget for food, leisure activities and clothes.”
It might be a good idea to help them set up separate bills and savings accounts. One tool which might help is the Starling Saving Spaces feature. It can be used to ring-fence money from the main account and you can create multiple virtual piggy banks.
Watch out for hidden costs
Parents warn there can be additional costs when a son or daughter is at university. Common ones include course materials, books and fresher’s week activities.
There may also be settling in costs. Ann says: “Parents often take (students) around when they get to halls and buy them some food and bits and pieces to start them off. Be prepared that you might have to sub them a bit.” Bowman adds this can happen again when they move out of halls and into a student flat, as there will likely be additional expenses, such as a deposit, bills and furniture.
You can find out about extra costs by asking questions at open days and looking on student websites.
Support is available
Most universities will have a funding or money advice service. “These can offer valuable information on the scholarships that may be available for that university, and tools and resources to help students source other additional funding, for example from trust funds and charities,” says Jackie Bryant, head of student support at Birmingham City University.
It can be a big change when your son or daughter goes away to university - for them and for you. But with an open conversation about finances and some preparation, the transition could be easier.
Article updated: 9th September
The above article is intended as general information and doesn’t constitute financial advice. You should take independent financial advice if you have any questions about your specific circumstances.