You made the grade. Now for the finance test

After the A-level joy, Emma Lunn sees how this year's new undergraduates can cope with the costs of university life

As hangovers subside from Thursday's record 96.2 per cent pass rate, hundreds of thousands of teenagers will spend the next few weeks preparing for student life.

The "to do" list will be long - checking course enrolment details, and sorting out your accommodation, books and travel - but the priority will be money.

Jokes about impoverished students used to feature in many comics' acts, but there's not much to laugh about today when you look at their cost of living and likely debts.

This September's crop will graduate in three years owing, on average, £13,680, according to the Student Money Matters survey from NatWest.

And the figure is set to rise steeply, as the 2005-06 intake is the last before the introduction of "top-up" fees, where universities can charge variable sums of up to £3,000 to pay for course fees.

While there will be plenty of government support this year and next for those from low-income families - financial help is available if parents' income is less than £32,750 - many students will be relying on other sources of cash to pay their way.

These will include student loans, overdrafts, part-time work, parental help and even credit cards.

As a broad guide, the National Union of Students reckons undergraduates will be looking at a monthly budget of £210 for rent, £40 for household bills, £30 for mobiles and telephone landlines, £30 for books and £110 for socialising. To help manage this, a decent bank account is essential.

If you've already got a young person's current account, look beyond simply "upgrading" to a student deal with the same bank. Instead, check out what's on offer elsewhere.

What really matters is a generous overdraft with low charges. But to compare these details, you'll first need to wade through all the freebies on offer.

Most high-street banks try to lure students with free gifts and incentives, in the hope they will become customers for life who go on to buy financial products like mortgages and personal loans. Free gifts on offer this year range from an MP3 player (at HSBC) to discount railcards (NatWest).

However tempting these might be, check those parts of the account that will have a greater impact on your life (see the table on page 18). "It's crucial that students consider features like overdraft rates and limits," warns Samantha Owens of financial analyst Moneyfacts. "The potential savings [to be made by shopping around on rates] mean you could possibly buy one of the advertised freebies and still have cash to spare."

The limit on an interest-free overdraft, which usually rises over the three or four years of your course, is key. While most lenders offer at least £1,000 without charge in the first year, Halifax is the most generous, allowing £1,750; this rises to £2,100 by year four.

Check the interest for any authorised borrowing above this. It ranges from the Bank of England base rate plus 1 per cent (HSBC) to 9.9 per cent (Abbey).

NatWest doesn't charge for extra authorised borrowing, but any request for money above the £1,250 interest-free limit in the first year will be entirely at the local manager's discretion.

Slipping into the red without telling your bank is definitely to be avoided: the interest levied can be as punitive as 29.84 per cent (Royal Bank of Scotland). HSBC charges the lowest rate at 14.8 per cent.

An extra fee may also be slapped on: Lloyds TSB fines you £30 if you breach the limit by more than £10.

If you think you're likely to breach your authorised