Students and debt are inseparable, but knowing what the exact figures will be - and likely sources of help - is essential. By Gwenda Thomas

If you decided to fund fully your offspring through university, you could be facing a bill of £25,000-£30,000 for a three-year course. According to a recent survey from the National Union of Students (NUS), the average costs for students studying in London is £10,186 a year and for students in most other places in the country £8,584 - and that is just for the 39-week academic year without any luxuries such as holidays or a car. For most families, this is out of the question.

If you decided to fund fully your offspring through university, you could be facing a bill of £25,000-£30,000 for a three-year course. According to a recent survey from the National Union of Students (NUS), the average costs for students studying in London is £10,186 a year and for students in most other places in the country £8,584 - and that is just for the 39-week academic year without any luxuries such as holidays or a car. For most families, this is out of the question.

Before you start considering whether your much-educated offspring might be better suited to a life as a hospital cleaner than clinician, no parent is expected to foot the whole bill. Fully parentally funded students are the exception. Most parents do the best they can; over 80 per cent of students take the student loan, which is woefully inadequate and, being the resourceful lot they are, find ways of plugging the gap in their finances. It is estimated that about 80 per cent of students work, mostly during vacations, and 57 per cent of students have a job during term time as well (NatWest survey). However, that doesn't absolve parents from what can be a hefty financial responsibility.

What is expected of parents?

Parents are an integral part of the Government's university funding system and though nobody can force you to pay up, it is expected that you will, because if you don't, it's your little Johnny who suffers. How much you pay will depend on family income and the calculation (excluding Scotland which has a different funding system) is made like this:


All UK students, except Scottish students studying in Scotland, are expected to pay fees. The full rate starting this autumn is £1,150 a year.

Parental input: fees are means-tested on parents' joint residual income (that's income minus tax deductible elements) and students pay accordingly. If the family income is less than £21,475 a year, all the student's fees are paid. If it's over £31,973 (£35,287 in Northern Ireland) the whole fee must be met by the student - in other words, parents are expected to fill that gap.


The maximum loan available to most students this autumn is £4,095 a year.

Parental input: part of the loan, around 25 per cent (slightly more in Northern Ireland), is means-tested on family income. Parents are expected to cover any shortfall on the loan. For a student to lose any of the loan, family residual income would need to be over £31,973 (£35,287 in Northern Ireland ) and to lose the full 25 per cent family residual income would be over £41,710 (£52,213 in Northern Ireland).

Add the full fees and means-tested part of the loan together and you arrive at the magic maximum which parents would have to contribute for one student in 2004/5:

* £2,175 for students studying in most parts of the country

* £2,410 if the student is studying in London

* £1,960 if the student is living at home

* £2,504 if the student comes from Northern Ireland

* £3,285 for Scottish students studying in Scotland (different system used).

There have worrying reports this week that comuter problems with the loan system may lead to students not getting their money by the start of term. However, the Student Loans Company has released a statement refuting these claims.

What parents do

In deciding how to fund your child, it is worth considering their capacity for money management. Many parents decide to pay for a student's rent or university halls of residence. At least then they can be sure that they have a roof over their head and possibly two reasonably good meals a day. Others prefer to send a monthly maintenance contribution, or pick up all bills such as utilities, books, fees and fares. The brave shell out a termly wodge and let the student get on with it.

What's the short-fall?

Only a hermit could survive on the student loan alone. A recent survey in Students' Money Matters suggests that the average weekly spend of a student studying outside London is about £139 a week and that's without taking books, clothes, utilities, fees and fares home into the equation. You only have to divide the out of London loan of £4,095 by the 39 week academic year to realise the figures just don't stack up.

Filling the financial gap

Most universities run job-shops which find suitable term-time jobs for students. Many of these jobs are around the university and offer hours that meet university guidelines of 12-15 hours a week. Pay varies, but is never less than the minimum wage.

Banks are surprisingly student friendly and offer an interest free overdraft of £1,000-£2,000. Payback terms after graduation should be checked as some banks offer better deals than others. But remember, it is more debt and can be expensive if exceeded.

Sponsorships are probably the most lucrative source of extra funding. Offered by many major companies, they generally include an annual bursary of around £1,200-£1,500 plus paid vacation work which could add another £3,000-£4,000 a year.

Families with a residual income of less than £21,185 could be eligible for a Higher Education grant of up to £1,000 a year (England and Wales only). How much you would receive will depend on income with the full amount being given to those earning £15,200 or less.

Many universities and colleges are well endowed and award scholarships to students. Contact your child's university or consult University Scholarships and Awards by Brian Heap, published by Trotman. Professional Institutions can also be a good source of scholarships and bursaries.

Charities and trusts could be worth a try, but don't hold your breath. They tend not to support the average first degree student. However, it might be worth parents trying their own employer to see if they run an educational fund. Career Development loans are another source available to students not receiving support through their LEA. Call 0800 585 505 for details.

'It's incredibly easy to be reliant on overdrafts'

Kate Smith took an environmental geology degree at the University of Leeds, followed by a postgraduate diploma in law at Leeds Metropolitan University

For the majority of students, their years at university result in them gaining not only a worthwhile qualification, but also a substantial dent in their bank balance, usually running into thousands of pounds. This was certainly the case for me: despite generous support from my parents (thanks mum and dad!) I am now in debt to the tune of nearly £12,000.

I started my university days a couple of hundred pounds in credit and sadly, since then, I have been consistently on the wrong side of my overdraft. Interest-free overdrafts are wonderful things (more money for alcohol...err, I mean textbooks!) but it is incredibly easy to become reliant upon them and, in my experience, banks stop being quite so nice to you once you've got to start paying them back.

A feature of the student bank account is the compulsory credit card. I avoided using mine throughout the first year but eventually succumbed during my second year. Although various people did go a bit crazy with their flexible friends, I kept quite good control over mine (ie I left it at home when going shopping!).

Another of the various means by which students can get their grubby mitts on even more (borrowed) cash is the student loan. I have had three loans from the Student Loans Company and one Professional Studies Loan from HSBC Bank (for some reason, postgraduates are not eligible for student loans and have to get grown-up bank loans complete with considerably more grown-up interest rates) and although I thought they were fantastic at the time, I am paying the price now - quite literally.

Part-time work was a good way to earn money during university. I had various jobs over the four years and found this to be a good way of getting extra cash in weekly instalments. Halfway through my final year, I stopped working to concentrate on finals and my dissertation.

University life was expensive. The ways and means above provided me with sufficient funds for the four years, but also enough debt to keep me going much longer than that!

Top tips for parents

* Don't let debt deter your offspring - graduates tend to earn more than the rest

* Be up-front about what you will pay and when - and stick to it

* Investigate the student loan as a source of borrowing if you want to fully fund your child through university

* Give extra help in the final year when the loan is lower and study pressure is greater

* Ask the family to give money as presents

* Try your employer for help with funding

* Check out the attic and contribute your old television, toaster, iron - whatever

Top tips for students

* Check-out bank interest free overdrafts for students

* Plug the hole in your finances with a job not more debt

* Take out only the money you can afford

* Don't suffer debt in silence - universities can help

* Credit cards are not another source of income but an expensive form of debt

* Don't blow all your loan during freshers' week

* Buy books second hand

* Get university accommodation - it's cheaper

Student tips from "Students' Money Matters", by Gwenda Thomas (Trotman, £14.99)