Student finance guide

You can expect to graduate owing as much as £20,000 to £30,000, depending on whose estimates you believe. However, being intelligent with your budgeting should soften the blow of student funding, both at university and after you graduate. Our going to student finance guide is a great place to start.

Tuition fees, student loans and grants

Paying your tuition fees

Tuition fees vary between universities and courses, with the new rules on tuition fees making some universities much more expensive than others. Scottish residents don’t have to pay tuition fees for Scottish universities – for now. People from other parts of the UK have to pay a portion of the tuition fees for Scottish courses. Welsh students at Welsh universities get their tuition fees covered by the government.

You can, if you wish, pay for your tuition fees outright; alternatively you can apply for a loan to cover your tuition fees.

Student loans

Student loans are divided into two sections. The loan used to help fund your day-to-day living is known as your maintenance loan. Tuition fee loans cover the cost of your education. Student loans have the best interest rates you will find, so if you don’t need the money then take it and put it in a high interest savings account, where it will earn you money. However, bear in mind that your tuition fee loan goes straight to the university. The easiest way to apply for a student loan is online via the Student Loans Company.

The size of your maintenance loan depends on a number of factors – your course, where you are studying, whether you are living at home, and your family’s wealth. 25% of the loan is means-tested, so if you choose not to go through means-testing then you will only be eligible for 75% of the maximum.

Maintenance grants

A maintenance grant is a part of the student funding to help pay for your living costs. However it differs from the student loan, as you don’t have to pay this grant back. It is means tested, so you’ll find out if you’re eligible when you apply for an extra maintenance loan.

The maintenance grant is based on your family income (if you are a dependant) and to receive the full or partial maintenance grant your household income has to be below specific limits. If you do receive some form of maintenance grant within your student funding, it is likely to reduce the student loan you receive, which could mean slightly less money to pay back after you graduate.

Student grants

As soon as you are accepted onto a course – even on a conditional basis – you should apply to your Local Education Authority (LEA) to find out if you can get a student grant. Most universities and colleges also offer bursaries and scholarships based on a number of factors including parents' income, grades or excellence in various academic, sporting or artistic fields. Surprisingly, many students never apply for these student grants, even though you don't have to repay them and they provide extra funds on top of your student loan.

Living at university

Living in a shared house or halls has its own risks and benefits. Make sure that you sort everything out with your landlord, including who is liable for the rent, what bills you are required to pay and whether any parts of your accommodation are already damaged. Don’t end up paying for council tax – full time students are exempt.

If you plan to watch live TV, then it is essential to get a TV licence: even if you’re using a laptop, games console or other mobile device that needs to be plugged in. If you don’t have a TV licence, you could be fined £1,000. Remember that you may need a separate licence if you have a TV in your room too.

Insurance

Don’t forget to insure your belongings, as student homes and accommodation are big targets for thieves. You may be covered for items away from home on your parents’ contents insurance but check the conditions before relying on it. Defaqto home insurance Star Ratings provide a good indication of the level of cover provided by insurance policies, and our contents insurance guide is the best way to learn more.

Choosing between student accounts

The major banks offer interest-free overdrafts to students in the hope that you will stay loyal to them once you start earning a decent salary. Don’t be dazzled by fancy gadgets and freebies. The most important features are the size of the interest-free overdraft and how much you will be charged for a further overdraft. Remember that while an authorised overdraft may be reasonable value, the interest can quadruple if you go overdrawn without agreeing it with your bank first. Our student accounts guide has all of the information you need about using a current account with your student funding.

Banks catering for students usually have branches on campus with a financial adviser on hand to help if you are struggling to cope. Also check what happens once you graduate as you don’t want to be stung with huge fees before you start earning.

Student credit cards

In addition to student accounts, there are also a range of student credit cards available. Most of these cards have a low spending limit, and you will be charged for exceeding this limit, with the provider locking the card until the bill is paid. It could be a good way to limit how much you spend.

Each student credit card gives students an interest free period of more than 50 days, which could be useful if you need to buy books, equipment or do a grocery shop at university before your student loan or grant arrives. However, remember that credit cards can get expensive if you don’t pay back a sizable part of your debt each month. Our guide to credit cards is a good starting place for credit card information.

Top tips for student funding:

• Try and apply for your maintenance grant and student loans as early as possible;
• once you know how much student loan you’ll be receiving, budget accordingly;
• have your tenancy agreement checked by your parents and your university’s accommodation service;
• shop around for student accounts, but remember to focus on an interest-free overdraft;
• don’t forget to insure your belongings;
• if you have a laptop or computer, ensure you have an extended warranty on the device, so you can get it repaired quickly at no extra cost to yourself if it goes wrong;
• if you land in financial trouble, seek help from your university or your bank;
• you may want to look for a part-time job in term time or your holidays, to help earn yourself a bit more money for nights out or to spend on yourself.

Going to university is an exciting, daunting experience. Keeping your finances in check will ensure that your time at University will run as smoothly as possible. Reading our student finance guide is only a starting point to sorting out your student finance. Check out our guide to student accounts or compare credit cards using our Star Ratings tool to make sure you are as prepared as possible before you leave home.