William Kay: Students learn the hard way when it comes to paying off their debts

Congratulations to all those Scottish hopefuls who passed their Highers this week, and the best of luck to their English, Irish and Welsh counter-parts waiting for the dreaded A-level envelopes to land on the mat next Thursday.

Congratulations to all those Scottish hopefuls who passed their Highers this week, and the best of luck to their English, Irish and Welsh counter-parts waiting for the dreaded A-level envelopes to land on the mat next Thursday. But, if the latest survey from NatWest is anywhere near the mark, the problems are only just beginning for those heading to university.

Sixth formers expect to pay £26,000 for a university education. This year's freshers will probably have to find almost £1,000 a month to cover rent, food, books, beer and cigarettes. That's £7,000 a year for students on ten-week terms, £5,500 for those slackers at Oxbridge on eight-week terms.

Nearly six in 10 of this year's graduates have left university with debts of more than £10,000 and a third believe that it will take them more than a decade to pay it off. But a survey by the Association of Investment Trust Companies shows that on average parents think their children will run up debts of about £8,000, and the would-be students themselves fondly imagine the figure will be as low as £6,000.

We will be publishing a detailed student survival guide nearer the start of term, but meanwhile it is never too early to start budgeting for the cost of going to university. Too many students sleep-walk their way to campus, relying on the myth that "everyone borrows" and the fact that the Student Loan, tied to the rate of inflation, is the best value around.

By no means everyone borrows. About one in seven graduates debt-free. I accept that a lot of those have simply had generous handouts from their families, which many cannot even contemplate. A little ingenuity can go a long way.

There was the student I distantly knew, who brought a shirt for every week of term and took them home again to be washed. (Now you realise why I knew him only distantly).

And, without being a killjoy, you can trim that £1,000 a month if you go easy on beer and cigarettes. It's easy to get into the habit of going down the pub every evening and spending £10 on drinks, even at the student union. That adds up. And no one should need telling about not smoking.

Everyone can make up their own list of money-saving tips. Equally important is to sort out a job to generate income. The best jobs get snapped up first, so it is a good idea to pay a pre-term visit to your uni- versity town to see what is available. Likewise vacation work nearer home.

And it may seem like money down the drain, but I am afraid you should allow some money for insurance. Student life can be highly disorganised, and people who have never lived away from home before can easily make mistakes involving their personal security. There are several specialist student policies on the market. Shop around, and watch out for small print. More Than will make 15 per cent of parents' household insurance available for student children free of charge, which helps. But remember, insurers are not charities: if you make more than the odd claim, you may suddenly find your premiums shooting up or you can even go on a blacklist.

Don't let the scare stories put you off. It's still the greatest fun many people will ever have.

* The Chip and Pin campaign has finally tipped over the abyss into barking mad surrealism. This is the campaign by credit card companies to prepare us for the day when retailers will reject signatures as verification and force us to remember a four-digit Personal Identification Number, or Pin.

This will be read by a chip embedded into the next generation of cards, hence Chip and Pin.

This week the campaign managers published research showing that more than a quarter of card-holders will struggle to remember a Pin, a proportion that could send the credit card industry spiralling into chaos. So they have dreamed up some handy hints.

"Go into a room," we are urged, "on your own." Sound advice, in view of what comes next. "Then say your Pin aloud several times." You couldn't make it up.

It's time to put the brakes on speeding

The London Congestion Charge and tobacco duty have taught us that tax and other measures can influence behaviour. But this week's car-crushing announcement suggests that our knowledge of this complex mechanism is still rudimentary.

The idea that uninsured cars involved in accidents should be destroyed has an animal appeal, particularly if you have lost your no-claims bonus after being rammed by a drunken yobbo. But the idea is fundamentally flawed.

What the rest of us ultimately want is fewer males in their teens and twenties driving irresponsibly. However, the desire of these guys to drive fast is very powerful, to impress women or their mates, or just for the hell of it. So powerful is this impulse that they will do anything to express it.

The law insists they must be insured, but insurers don't want their business except at deterrent premiums that they can't afford. So they don't insure. I predict that crushing their cars will not stop the problem. They will say to themselves that if their car is going to be crushed they may as well steal it, an argument that becomes more alluring after a few lagers. Net result: more car thefts, more crashes, and greater unhappiness.

I do not believe the problem will be solved until it can be taken out of hands of both drivers and insurers, by installing unremovable devices which limit speed.

If we are all forced to drive at less than 50 mph it will be a small price - and we will save millions of litres of fuel. a year.

w.kay@independent.co.uk

Independent Partners; Do you need financial advice on your investments, pension or insurance? Book a free consultation with an independent Financial Adviser at VouchedFor.co.uk

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