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Tony Levene is a renowned financial journalist, who has previously been a columnist for Guardian Money. He has written several books, including 'Investing for Dummies' and won the ABI Lifetime Achievement award and the Headline Money award.


Financially surviving university

Our oldest child is off to university for the first time in late September. And our other two should follow in the next four years. How can we all survive this financially?

One thing you already know is that university education is expensive. A generation ago, there were no tuition fees and maintenance grants. You could collect a debt-free degree. Now the National Union of Students estimates graduates owing nearly £54,000 after a three yea course – roughly half in tuition fees and the rest in living expenses.

The good news is that the up to £9,000 a year fees are not repayable until the student both graduates and earns more than £21,000 a year.

Quotation MarksHome Insurance is essential. One bright spot is that many policies cover the belongings of your student offspring when they are away at college.Quotation Marks

There are also non-repayable maintenance grants between £3,250 and £50 for students where their total household income is below £42,600. The bad news is that student loan interest is payable at inflation plus 3% during the student years and up to that rate afterwards. At current rates, outstanding loans will double every 12 years. It's a huge financial commitment and beyond most Banks of Mum'n'Dad – especially parents with more than one child. Your first child is already on her or his way to dreaming spire, redbrick or concrete and glass. There's little escaping the bulk of the costs but thrift won't go amiss.

First year accommodation is likely to be in a hall of residence. These can be expensive at around £3,200 a year – more so if meals are included. Self-catering can save a fortune but don't mistake that for a diet of takeaways or Michelin-starred eateries. A student cookbook plus a collection of essentials – rice, pasta, tuna, tinned tomatoes, tea, coffee – on day one could help. You can't expect your child to know how to budget without help. Putting part of loans and other money away in a separate account for later on in the term prevents running out of cash by the end of October.

Tips for student savings

Being careful is not the same as being mean. Second century AD Roman soldier Marcus Aurelius said: “Remember that very little is needed to make a happy life.” So your child should always ask “Do I really need it? Can I afford it?” before each purchase. Just five high street lattes a week in term time add up to £300. One way to budget is the no-plastic rule.

  • Cards have their place – cash machines and buying online- but not going out. Bars and clubs often have ATMs – usually charging up to £2 a withdrawal – to tempt into spending more. Take what cash is affordable and when it's gone, it's gone. No card, no temptation.
  • At the risk of sounding a boring parent, emphasise that it's books
    before booze.
  • A car is an absolute no-no – it costs a fortune. An old bike is better and cheaper than bus fares – but never skimp on locks. A £100 lock will last decades – you can open cheap ones with the metal from a drinks can or even a ballpoint pen if “instructional” youtube videos are any guide.
  • A student railcard can save its costs several times over if university and home are far enough apart.
  • An old mobile phone means is one less expensive item to lose. And your child can have a SIM only deal - £7 to £10 a month should buy enough texts, minutes and downloads - rather than pay for the shiniest smartphone.
  • A flashy new laptop is a thief magnet. So forget Windows 8 machines (in shops from mid October 2012) or that £1,000 Apple Mac and go for battered but working.

Home Insurance is essential. One bright spot is that many policies cover the belongings of your student offspring when they are away at college.

Your two other children might think about apprenticeships and other non-university routes into adult working life. Or what about going abroad to study? EU citizens could attend a taught in English degree course in the Netherlands at around £1,400 a year or Ireland at about £1,800. And there are English language medical degree bargains in Hungary – EU certified as
compatible with the UK.

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