Go Higher: Pin your hopes on the parents

The Bank of Mum and Dad is bearing the brunt – but students must make up the rest, says Gwenda Thomas

Parents are still managing to do their bit to support their offspring through university, despite the financial crisis. More than half of all students – 52 per cent – are receiving on average £69.51. That means 61 per cent of their weekly term-time income being supplied from parents – according to the NatWest Student Living Index published this month.

But what of the other 48 per cent of students? The decision this year to assess family income on the 2007-8 tax year has alarmed many parents, especially those whose earnings have plummeted in the last 12 months. Don't panic. If your income has dropped more than 15 per cent since 2007-8, fill in the Current Year Income Assessment form pretty smartly – available at www.direct. gov.uk/studentfinance or by calling 0845-300 5090. At best, a new assessment could be through within a 14 days; but six weeks is more likely.

Parents should fill in the form even if they have not been assessed to contribute towards their child's maintenance. Your lower income could mean a larger maintenance grant, and a university bursary for your offspring.

At £4,950, the Government's financial support package for most students isn't exactly generous. It is made up of grants, loans, bursaries and parental contributions. Who receives how much from where depends on where you live, what university you attend and how much your parents earn.

Is it enough? Not, according to the National Union of Students. An NUS survey last year suggested that, a student needed £10,481 (£12,624 if studying in London) for a 39-week academic year, excluding tuition fees. So it is going to be a tough year for many students, and with no maintenance/grant increases on the horizon for next year, things can only get worse.

So what can students do? Pre credit-crunch times, the answer was simple: "get a part-time job", and before jobs became scarce, some 80 per cent of students did just that, working either in term-time or during vacations. Today that is not so easy – but not impossible.

University job shops aren't as gloomy as you might think. "We are down approx 15 per cent on last year, however that doesn't show the whole story," says Scott Foley, student recruitment manager at the University of Manchester Careers Service.

"There was an exaggerated drop in late autumn when news of the recession kicked in. This bounced back in January and for three of the last six months our vacancy stats have been higher than last year."

His advice to students is to be prepared, pound the streets and put in the legwork. And make sure you look like somebody a firm would want to employ.

Other sources of finance include: the Access to Learning Fund, operated by universities to help bail-out students who get into financial trouble; university scholarships; professional bodies; charitable trusts; and company sponsorships.

And then there are the banks. At this time of financial turmoil, you might think they would turn their backs on the profligate student. Not so. Students are still seen as the big earners of the future, and there are some useful perks on offer to lure them in – not least the interest-free overdraft which is seen as an essential part of the funding package by many students.

The ups and downs of the financial support package

The figures given here are largely for England. For differences in other parts of the country see the Devolutionary Differences box.

The maintenance grant: £2,906. If family income is £25,000 or less, a full grant is given. If it's £25,001-£50,020, the student receives a portion of the grant. Over that – nothing. No increase is expected next year, except in Wales.

Maintenance loan: £4,950 (£6,928 if studying in London; £3,383 if living at home). The loan is reduced by the amount of maintenance grant a student receives, and the contribution parents are assessed to pay. No increase expected next year.

Parental contribution: The maximum any parent is expected to pay for one child in England is £1,386 (£1,940 in London; £1,075 if living in parent's home). Only if family income is £50,778 or more are parents assessed to make a contribution. The student maintenance loan is reduced by assessed amount regardless of whether parents pay up or not.

University bursary: £319 minimum. This is paid to all students receiving full maintenance grant by universities charging full fees. Most universities give more – £1,000 is thought to be the average. Some universities give a bursary to all students receiving a portion of the maintenance grant. Bursary schemes vary in generosity with most operating on a sliding scale. Students should check with their university.

Fees: £3,225 a year maximum. No new student in England receives government help with fees. Universities can charge less than the maximum, but few do: Greenwich (£2,900), Leeds Metropolitan (£2,000) and Writtle College (£2,906). Fee loans are available to cover the full cost of fees, to be paid back once the student qualifies. Fees will go up next year to £3,290.

Debt: £20,000-£30,000 approx. If a student lives at home for free, and receives a full grant, their final debt could be no more than their fees approximately £10,000. But a student taking a four-year course at a London university, who receives no grant, a full loan with no parental help could face a final debt of at least £40,000. If it's a medical student, think £50,000. And expect an increase next year.

Payback: graduates pay 9 per cent of earnings over £15,000. At £16,000 a year, payback is £7 a month, at £25,000 a year it's £75 a month - taken from pay at source. No change expected next year.

Interest rates: have hit an all-time low of 0 per cent, down from last year's high of 3.8 per cent. Next year: who knows?

Gwenda Thomas is author of 'The Guide to Student Money 2010' (Trotman, £16.99)

Devolutionary Differences

What's the deal with the rest of the UK?

Scotland

*Scottish students studying in Scotland don't pay fees. Neither do EU students studying in Scotland. "Unfair!" you cry. It's how the EU law works.

*Students from the rest of the UK pay reduced fees: £1,820 a year (£2,895 if studying medicine) – all courses in Scotland are at least for four years.

*Maintenance loan for Scottish students: £605 to £4,625 depending on family income and where the student lives. Families with income below £24,275 are not expected to contribute. The rest are. The maximum assessed contribution for one child is £3,700. Additional loans are available for students from low-income families.

*Maximum maintenance bursary: £2,640. The family income threshold to receive a bursary is £35,195.

*No mandatory university bursaries given.

Wales

*Welsh students studying in Wales, and EU students, currently receive a fee grant of £1,940, in effect reducing their fees to £1,285. This is to be scrapped for future students, in favour of increased grants of up to £5,000.

*Students from families where income is above £39,793 receive no grant.

Northern Ireland

*The full maintenance grant of £3,406 is currently higher than anywhere else.

*The family income threshold for receiving a grant is £40,238.

How the banks can help

HSBC

Interest-free overdraft of £1,000 in first year, rising to a maximum of £2,000 in fourth year

Best freebie: two years' free worldwide travel insurance.

Lloyds TSB

Tiered interest-free overdraft of up to £1,500 in the first year.

Best freebie: one year's membership to the Youth Hostel Association and 35 music downloads.

RBS

Interest-free overdraft of £2,750.

Best freebie: £100 off selected laptops; a free discount card; and a free 4GB USB stick.

Natwest

Interest-free overdraft £1,250, rising to £1,800 in fourth year.

Best freebie: five year 16-25 Railcard worth £130.

Halifax

Interest free overdraft £3,000

Best freebie: commission-free currency and traveller's cheques.

Barclays

Interest free overdraft £2,000.

Best freebie: Overdraft extension to £3,000 on request.