As most students are joining University for the upcoming January intake, or heading back to their second year of study, so many of them are considering their financial options. So where should they start?
The first focus for students seeking higher education in the UK should be a government-funded loan that covers tuition fees and living costs. However, in some cases, this loan isn’t enough to cover all tuition fees and living costs for the students applying for a postgraduate qualification. There is a vast gap between tuition fees and living costs. According to previous studies, only 30% of the students believe that government funds were enough to cover the full tuition fee.
So the next question that appears in a student’s mind is “how will this gap be filled?”
The answer is simple, more than 50% of the students cover that gap with the help of their family or friends. Whereas, other students rely on part-time jobs to earn income. Additionally, universities have now recommended that students study a minimum of 20 hours a week to ensure focus on the course they are studying. Moreover, despite the help of maintenance loans, students may still find themselves falling short on funds, therefore, universities can help through the options of grants, scholarships and bursaries.
There are numerous scholarships and grants available for students from the university and the government. These are available for the student with disabilities, students who are careers and students from a low-income background. Sometimes, universities have extra finance options for international students, so always contact your university for the grants. Essentially, to manage money effectively, you should come up with a monthly budget plan that includes accommodation and living expenses. You should also calculate the amount that can be offered by your family and friends/ part-time job.
If you have explored all of the options and still have a gap in your funds, then the funding options previously mentioned can be an alternative. It is important to open a student account – in which you can hold your money – as it provides students with an overdraft and bank card.
It’s always a good idea to have a bank account at the start of university. Bank overdrafts come with all the perks for the students as they offer an interest-free overdraft at approximately £1,000. It is a short term solution for quick cash but can’t be considered for the long term plan as it can quickly cross the interest- free limit, incurring a significant fee for the amount. Also, be sure to read the terms and conditions agreement of the repayment structure. Many banks offer student debit cards with an average rate of interest of 18-20 %. It is a good option for the funds but ensures you monitor the interest rate on every penny used.
Finally, there is always an option of applying for a private loan – for students, this is another way of financing university costs. However, most students are not aware of this kind of funding. Make sure you go through market research about private loans tailored for students as most of the loans don’t require minimum income, employment history or previous credit history.