The real costs of University – and how to reduce your student debts

Taking a typical three year degree course, this amounts to over £27,500 worth of debt upon graduation. With the addition of maintenance loans to cover living expenses, the average student now leaves University owing over £50,000. ** A pretty big figure for someone in their early twenties.

You should however, remember some key points about student debt.

Firstly, while it’s important to recognise that this is a large amount of debt, it is not ‘normal’ debt that you would rack up through personal loans. It may be better to think of it as a tax rather than a loan repayment. Students aren’t required to repay their loan until the first April after graduation and compulsory repayments don’t begin until a graduate earns over the threshold, which is currently £21,000. This amount will rise along with average earnings, and once a graduate earns enough to make repayments, this is automatically paid from a wage in the same way as income tax or national insurance.

If a graduate never earns over the threshold then they will never be asked to pay the loan back – and it will be written off 30 years after they become eligible for repayment. Student loans aren’t logged on credit files so will never affect a credit rating and debt collectors will never chase a graduate for repayment of a student debt. It’s currently estimated that 75% of student loans won’t be repaid. †

However, while you don’t need to let the threat of student debt give you a headache, you must remember that it’s not always possible to live entirely from a maintenance loan and by taking out overdrafts and credit cards, the real debts start racking up.

So, how can students save their debts from soaring? We take a look at cutting some simple costs of starting University.

Rent and bills: 

The easiest way to save on rent is to continue living at home throughout University. But for students moving away to study, getting the best rental deal is important. Student halls usually offer the cheapest rent and are a great way to meet new people, but for students preferring to house share, there are still ways to keep the costs down.

Living in the city centre shouldn’t be a deal breaker. Even moving a mile or two out of town can make a huge difference to rent costs. Some agents and landlords offer a fixed price deal which includes utilities, meaning there are no nasty surprises when a housemate leaves the heating on over the holidays.

For other bills, students should consider what is really needed. Gas, electricity and water rates all need to be paid for, but extras such as satellite television are an unnecessary luxury. Using a tariff comparison for energy suppliers will ensure students get the best deal and energysavingtrust.org.uk  has great advice on cutting down energy consumption.

Travel:

Is a car necessary at University? Consider how expensive it is to run and insure. For students living near University, is it close enough to walk, cycle or use a bus? Some Universities with large campuses provide free or discounted bus services. If a car really is a must have, sharing with house or course mates can keep fuel costs down.

For those important trips home, booking travel well in advance (ideally 12 weeks), will mean bagging the cheapest tickets. A 16-25 railcard is available for all full-time students (even mature ones), at a cost of £30 per year from 16-25railcard.co.uk  and will save you up to a third on train fares.

Travel by coach may not be luxurious, but could save you pounds. A Young Person’s Coachcard costs just £10 annually at nationalexpress.com/waystosave/young-persons-coachcard.aspx  and will give you a third off National Express standard fares. Alternatively, megabus.com  is another low cost coach service which offers journeys for as little as £1 each way.

Food:

Student cooking doesn’t have to consist of a loaf of bread and economy beans, it is possible to eat well on a budget.

The trick to eating well at a low cost is planning ahead. Making a shopping list and sticking to it stops the aimless wander around the supermarket and it doesn’t take long to get into the habit of shopping and cooking for one.

Scrapping the takeaways, freezing leftovers and reducing portion sizes all go a long way to saving money. Local markets might offer better deals than the larger chains, but one perk of shopping in a supermarket is loyalty cards, as they send discount vouchers for regular purchases. Some also offer student top-up cards which can come in handy if parents want to help students out.

There are plenty of websites, blogs and recipe books that are dedicated to inventing creative, healthy and tasty meals that can be done quickly, easily and cheaply. The most popular include studentrecipes.com and bbcgoodfood.com/recipes/collection/student.

Course materials:

Most courses will provide a list of recommended reading that you will be required to get through in the first term.  Buying books brand new is expensive, but buying second hand from fresher’s week fairs and online auction sites should keep the costs down. The University library should also stock all of the required books, although it’s usually a limited number of copies. Remembering to return library books on time will avoid racking up hefty fines at the end of term.

For practical courses, the chances are that students will need to fork out for materials. Some Universities offer starter kits to help new recruits, giving them time to scope out local shops and markets to find the best deals.

Websites such as uniswap.com  offer learners the chance to swap Uni essentials such as books and unused course materials as well as clothes and even room furnishings!

Discounts:

One of the great perks of being a student is the student discount! Most major retail stores and restaurants offer at least 10% discount for students, and the majority accept a valid University ID card.

For bigger savings, an NUS Extra card is available at nus.org.uk/en/nus-extra.  It costs £12 a year and is accepted in more places than a student ID, including those that don’t normally offer discount, such as Ticketmaster and Amazon. It also encompasses the International Student Identity Card which means students can still bag themselves high street discounts if they find themselves abroad.

Most Universities will negotiate great discounts with local businesses, some all year round but most during fresher’s week. Fresher’s fairs are the best places to grab vouchers but take a look at studentdiscountbook.co.uk  for more bargains.

Getting a job:

 That’s right, it may seem obvious, but the best way to reduce student debt isn’t just to save money but to actually make money.

The trick is to apply early, so once the timetables are out and students have worked out how much time they can commit to a job, they should begin the job hunt.

Most University websites have a jobs section where they not only list current vacancies in the University, but also part time jobs in the local area that are suitable for students. There are also a number of websites dedicated to this, such as studentjob.co.uk and e4s.co.uk.

While jobs in bars and pubs are aplenty, the working hours may not be right, especially if there are early morning lectures to contend with, but there are plenty of other part time opportunities.

Getting the balance between studying, working and socialising can be tough but once it’s right it not only saves money, it provides valuable work experience and can make for a great year at Uni too!

Don’t forget that all Universities have facilities and services in place to help students that are struggling financially. Some students may be entitled to a bursary or hardship loan in certain circumstances, and there will be staff and counsellors on hand to help with budgeting as well.

* independent.co.uk/news/education/university-tuition-fees-england-highest-world-compare-students-student-loan-calculator-a7654276.html(2017)

***bbc.co.uk/news/education-40493658(2017)

† telegraph.co.uk/news/2017/08/16/higher-education-has-become-unsustainable-young-people-know/ (2017)

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