A student’s life of debt: Belfast Telegraph

Thousands of students are finalising their university arrangements for next year following the publication of the A level results. But amid the pressure to choose the right university and the best course, it is easy to overlook the need to also find the most suitable bank account.


The unpleasant reality is that studying at university is very expensive. Students can expect to owe £23,000 by the time they graduate – the just published Push Student Debt Survey shows that undergraduates accumulate debts, on average, by more than £5,000 per year.

Yet most parents believe the cost of university is only half that amount, according to analysis by Equifax — so students may get less parental help than they hope.

The good news for students at Queen’s University or the University of Ulster is that Halifax reports that the student cost of living here is the second lowest of anywhere in the UK, while the cost of accommodation is the very lowest.

Undergraduates here can expect to spend in total £160 a week, compared to £248 in London.

And the average weekly rental here is less than £41, compared to the UK average of £77 or £95 in London.

Beware the unexpected

The National Union of Students (NUS) warns, though, of being caught out by unexpected costs. A student on a mathematical or computer science course should expect to find an additional £1,430 per year to pay for books, equipment and fieldwork. For medical students the often unexpected and unbudgeted extras cost £902.

“Universities need to be much more open about the hidden costs associated with different courses,” says Wes Streeting, the NUS president. “Many students preparing to go to university this summer may be in for a real shock.”

It is almost inevitable that students will face years of debt after they graduate because of the introduction of tuition fees.

Both Queen’s University and the University of Ulster charge the maximum permitted £3,225 for tuition fees.

Those studying in Britain face similar charges.

Although tuition fees in Scotland are paid by its government, this only applies to Scottish students and those from non-UK countries in the EU.

But while tuition fees are chargeable, students may defer paying them by obtaining a student loan to cover the fees.

These become repayable after graduation when a person starts earning over £15,000 per year.

Some grants available

Maintenance grants can be available for students from lower income households. If household income is below £18,820 a year, the student is eligible for support of £3,406. Between £18,821 and £40,238 the student is entitled to reduced financial support on a sliding scale. Above £40,238 and no grant is paid. Grants can be obtained through the local education and library board.

Additional student loans are available to help with living costs. In Northern Ireland, these are set at £4,745 per year, or £3,673 where the student lives with their parents.

Both Queen’s and Ulster also offer financial assistance to students from low income households.

To ensure that funds are paid to a student at the start of the academic year, it is important to open a bank account in good time. The best advice is to open an account with a bank that offers the services you want, does not charge for a current account and will not cost a fortune if you end up being overdrawn.

But it is essential that you only go overdrawn with the bank’s approval — unauthorised overdrafts cost a fortune.

Find a good overdraft

“As most students spend their university life living in their overdraft, it is worth finding an account that offers a good level, interest free,” stresses Michelle Slade, an analyst with Moneyfacts.

Banks worth considering include Northern Bank for its Freedom Account and Halifax’s Student Current Account, which have interest free overdraft facilities of up to £3,000.

HSBC’s student account has an interest free overdraft facility of only £1,000, but charges a modest 3% over base rate for authorised overdrafts — that is just 3.5% at present. It also pays a very good 1.98% on credit balances.

Ulster Bank offers a maximum £2,000 overdraft limit. First Trust’s student account comes with an interest free overdraft of up to £1,850.

The maximum on the Bank of Ireland account is lower, at only £400 for first year students and £500 in later years.

Ulster, First Trust, Northern and Bank of Ireland also put new account holders into a prize draw with the possibility of winning electronic goods, a cash prize or free flights.

It may attract some custom – but students should focus on the best account rather than the long shot of winning a freebie.

Read more: http://www.belfasttelegraph.co.uk/business/help-advice/life-as-a-student-hidden-costs-and-threat-of-debt-14465463.html#ixzz0PffPltag

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