As the start of the academic year approaches, your child or grandchild may be preparing to head to university. Whether they are a returning student or a first-year undergraduate, you may be worried about how they are going to afford the rising cost of higher education.
Although they have got through the anxiety of this year’s exceptional A-level results, your child or grandchild may now face the stress of paying for university. Read on to find out what costs they will face, and what you can do to support them.
The costs of university life
The most obvious costs associated with university are the tuition fees.
In England, Northern Ireland and Scotland, universities can charge up to £9,250 a year for undergraduate courses, while the maximum for Welsh universities is £9,000 a year. Over a traditional three-year course, this adds up to an eye-watering £27,750 (£27,000 in Wales).
A study by Times Higher Education revealed the costs your child or grandchild can expect:
- The average rent for a student in the UK is £4,914 for a 39-week contract
- Halls can be cheaper than student flats but can vary more in price. For example, a room at the University of Bristol can cost anywhere from £4,662 to £9,093 per academic year. The price depends on the size of the room and whether the accommodation is catered or not
- Privately rented rooms in shared student houses cost an average of £6,000 for a 52-week tenancy. This is significantly more in bigger cities, such as Bristol, where the average student rent according to The Tab is £1,537 a month – more than £18,000 a year
- Although the cost of most student housing includes bills, one-third of students will still pay bills on top of rent. This costs an average of about £50 per month.
The remaining expenses accumulated during university life depend largely on the course your child or grandchild is studying, and their habits and lifestyle.
- The average food bill for students amounts to £2,010 for a 42-week term
- Books, study materials, trips, and university equipment will cost £480 a year on average. According to the University of Bristol, costs for their students run slightly cheaper at an average of £400 a year
- A student travel card costs £45 a month on average. In Bristol, a First Group monthly travel pass is £70 with a student discount. Travel in London costs even more at approximately £140 per month
- When they need to unwind, a typical night out for your child costs on average £30, although this can vary drastically based on location.
According to the Times Higher Education figures, a single year at university will cost more than £8,000 on average. And that’s excluding tuition fees, and assuming that your child won’t be going out at all. A regular three-year degree with all expenses included will cost more than £50,000.
So how can you financially support your child or grandchild at university? There are several options you can consider. Read these four tips to find out how you could support your child through their studies.
1. Apply for student loans
The easiest way to help your child pay for university is to help them with their Student Finance application.
Every undergraduate can apply to receive a loan of up to £9,250 per year to cover their tuition fees. They can get additional help with living costs by applying for a maintenance loan to cover some of their everyday living expenses.
The amount of maintenance loan your child/grandchild can get will depend on where they will live and study, as well as how much you earn.
Your child can apply for the minimum loan for their living situation without disclosing your household income. However, if your income is less than £65,000, it could be worth providing income details as the child could benefit from a larger loan. Remember to include your taxable state benefits, pensions, and income from UK and foreign investments when providing your financial details.
Despite the support students can get through tuition and maintenance loans, most will find their funds falling short of what they need to cover all their expenses. In fact, according to Save the Student, the average maintenance loan is only £540 a month. This is £267 less than the average living costs of £807 a month.
2. Encourage your child to work part-time
The National Student Money Survey revealed that, in 2019, two-thirds of students worked part-time to supplement their income.
The time students can commit to working, even part-time, depends largely on their course and workload. Even at minimum wage, a 10-hour working week can earn an 18-year-old student more than £275 per month.
You could help your child or grandchild support themselves by encouraging them to find part-time work that doesn’t clash with their studies. You could look for job opportunities together and offer to proofread their CVs and cover letters.
3. Use your savings
Even with many students working part-time, The Uni Guide says that more than half of parents contribute to the living expenses of their university-aged children. On average, this amounts to £360 a month.
If you want to directly contribute to your child’s finances, you may have accumulated savings in an ISA or other savings accounts. This could be the right time to access these funds to support your child.
Additionally, the first Child Trust Funds are maturing into adult ISAs this year. If your child was born after 1st September 2002, this is perfect timing as they will be able to access the money in the account as soon as they turn 18.
4. Remortgage or downsize
If you have equity in your home, you could also consider a remortgage to raise the funds needed to support your child’s university education. The amount you can borrow will depend on factors such as your age, income, and the equity in your home. Bear in mind that you could pay a sizeable sum in interest if you spread the cost of borrowing over several years.
If you have been thinking about downsizing your home, having one fewer child in the house could be the right time to move forward with your plans. You could use the capital raised from downsizing to fund your child or grandchild’s university education.
Think carefully before securing other debts against your home. Your home may be repossessed if you do not keep up repayments on a mortgage or other loans secured on it.
Get in touch
Do you want to help your child or grandchild when they head to university? Whether they are leaving home now, or you have a younger child/grandchild who you want to support financially in the future, contact us for advice.
Please email firstname.lastname@example.org or call 01454 416 653 to find out more.