should debt put me off going to uni?
Ugh. If you're not getting our message already, you may never get it...but here's one last push (pun damn well intended): you've got £9,250 a year just for tuition. Then you've got your maintenance loan on top of that. On average that is £55,000 of debt to repay before you even (attempt a) smile for your graduation photo. Men In Black-style FBI debt collectors following you around every corner for the rest of your life until every single pound is repaid - oh and what's that? "Interest to pay on top of that too?". You'd be forgiven, as an British student wanting to study at an English university, to think "sod this, where's the Apprenticeships website?".
BUT HOLD ON, remember when we mentioned earlier that graduates in this country earn on average a quarter of a million pounds more than non-graduates over the course of their lives and that even with a lot of money to theoretically "owe" back...over 80% students on the current repayment system won't pay back everything they borrowed - or the interest that goes with it? The fact is (and trust us, we've been researching and talking about student money for over 25 years) that this current tuition fee system should NOT AT ALL PUT YOU OFF GOING to fulfil your dream of going to university and studying a course you'll truly love. If you don't believe us, believe money expert Martin Lewis, who has conducted research in 2017 to suggest that you shouldn't at all be put off university by the current tuition fees, or the controversial 6.1% interest rate attached to your loan. Let's pause on that 'interest' thing for second, to explain it to you...
From the moment you start your higher education course - to 30 years after you graduated, you not only have to pay back your exact total of what you borrowed (tuition fees + maintenance loans); you also have to pay an 'interest' fee on it. Interest is a 'borrowing fee' the Student Loans Company attach to your total, as a sort of "contract" for you agreeing to take it all out when you ticked the student loan box on your UCAS form. Many students are freaking out that on top of their already sky-high fees to repay, the interest rate slapped on top of them is also so astronomical (and we think it is a scandal that they even put interest on student loans but that is a whole different vent of ours and one we don't have time for here) that alongside your feelings of leaning away from university, your parents are also probably raining down the word "debt" and "don't go to uni" on you every single time you're opposite them at the dinner table, or next to you in the car...
Don't let 'debt' put you off going to university...
Martin Lewis - and other leading experts such as the Institute of Fiscal Studies and the London School of Economics - believe it is not at all worth worrying about debt, because the vast majority of students won't pay it all back. Lewis says in a July 2017 article in The Guardian...
"Only if the student lands a job earning £40,000 a year on graduation, and then enjoys big pay rises after, should they consider repaying their loan early. A graduate earning £36,000 a year will repay £40,500 of a £55,000 total student loan over 30 years...at the current repayment rates. The remaining debt will be wiped clean after 30 years.
Most graduates won’t come close to repaying 6.1% interest rate. More potently it’s because what you owe [your borrowing plus interest] doesn’t change what you repay. That’s fixed at 9% of everything earned above £21,000. I’m tempted to say ‘rip up your student loan statement’ – it’s just frightening and irrelevant. Just accept you’ll pay a 9% increased tax-like burden."
Although we at Push pray this current tuition fee system changes, we couldn't agree more that students must not get hung up on this silly term 'debt'. It is a fake term, and a dangerous one - as it potentially stops a lot of students from considering university and alternative higher education courses - especially if you are the first person (or generation) in your family to consider going to university, or from an area where progression to university and higher education courses is historically low (for whatever reasons). Martin Lewis in The Guardian also highlights this fact: "for most university leavers, the term ‘student loan’ is a misnomer – it should be renamed the more accurate term: a ‘graduate contribution’ system. That doesn’t mean it’s cheap or fair, simply that people would make better financial decisions if they focus on the fact they’ll have to pay the equivalent of 9% extra tax above £21,000 for 30 years".
Just remember what we said at the start of this: people who go to university earn drastically more over the course of their life's earnings than the £55,000 they might have to pay back (if you're one of the few mega-rich students who actually will). If you're considering going to university or into an alternative higher education course, just mentally accept that you'll be paying a bit more back in tax over the 30 years after your course finishes - as your gateway to not having to pay a single penny to attend university whilst you were actually there studying. And after the 30 year repayment window?
Well let's imagine you graduate at 21 years old and your repayments stop (no matter how much you've paid) by the time you're 51 years old. At that age, you will still be working for perhaps 15 more years...and the good news? That's the time you're most likely to be in your peak earnings...which means whether you've paid off all or only some of that loan/interest, the Student Loans Company can't take a penny more back off you...even if you still owe £20,000 of what you borrowed eons ago. You've now got that 9% of your salary that was going on repayments, all to your jolly self...to spend on whatever the hell you damn well please; a yoga retreat in Bali, that epic road trip you always planned...or perhaps even taking your son or daughter for a meal to celebrate their graduation (right, we're really getting ahead of ourselves).
BUT HOLD ON, remember when we mentioned earlier that graduates in this country earn on average a quarter of a million pounds more than non-graduates over the course of their lives and that even with a lot of money to theoretically "owe" back...over 80% students on the current repayment system won't pay back everything they borrowed - or the interest that goes with it? The fact is (and trust us, we've been researching and talking about student money for over 25 years) that this current tuition fee system should NOT AT ALL PUT YOU OFF GOING to fulfil your dream of going to university and studying a course you'll truly love. If you don't believe us, believe money expert Martin Lewis, who has conducted research in 2017 to suggest that you shouldn't at all be put off university by the current tuition fees, or the controversial 6.1% interest rate attached to your loan. Let's pause on that 'interest' thing for second, to explain it to you...
From the moment you start your higher education course - to 30 years after you graduated, you not only have to pay back your exact total of what you borrowed (tuition fees + maintenance loans); you also have to pay an 'interest' fee on it. Interest is a 'borrowing fee' the Student Loans Company attach to your total, as a sort of "contract" for you agreeing to take it all out when you ticked the student loan box on your UCAS form. Many students are freaking out that on top of their already sky-high fees to repay, the interest rate slapped on top of them is also so astronomical (and we think it is a scandal that they even put interest on student loans but that is a whole different vent of ours and one we don't have time for here) that alongside your feelings of leaning away from university, your parents are also probably raining down the word "debt" and "don't go to uni" on you every single time you're opposite them at the dinner table, or next to you in the car...
Don't let 'debt' put you off going to university...
Martin Lewis - and other leading experts such as the Institute of Fiscal Studies and the London School of Economics - believe it is not at all worth worrying about debt, because the vast majority of students won't pay it all back. Lewis says in a July 2017 article in The Guardian...
"Only if the student lands a job earning £40,000 a year on graduation, and then enjoys big pay rises after, should they consider repaying their loan early. A graduate earning £36,000 a year will repay £40,500 of a £55,000 total student loan over 30 years...at the current repayment rates. The remaining debt will be wiped clean after 30 years.
Most graduates won’t come close to repaying 6.1% interest rate. More potently it’s because what you owe [your borrowing plus interest] doesn’t change what you repay. That’s fixed at 9% of everything earned above £21,000. I’m tempted to say ‘rip up your student loan statement’ – it’s just frightening and irrelevant. Just accept you’ll pay a 9% increased tax-like burden."
Although we at Push pray this current tuition fee system changes, we couldn't agree more that students must not get hung up on this silly term 'debt'. It is a fake term, and a dangerous one - as it potentially stops a lot of students from considering university and alternative higher education courses - especially if you are the first person (or generation) in your family to consider going to university, or from an area where progression to university and higher education courses is historically low (for whatever reasons). Martin Lewis in The Guardian also highlights this fact: "for most university leavers, the term ‘student loan’ is a misnomer – it should be renamed the more accurate term: a ‘graduate contribution’ system. That doesn’t mean it’s cheap or fair, simply that people would make better financial decisions if they focus on the fact they’ll have to pay the equivalent of 9% extra tax above £21,000 for 30 years".
Just remember what we said at the start of this: people who go to university earn drastically more over the course of their life's earnings than the £55,000 they might have to pay back (if you're one of the few mega-rich students who actually will). If you're considering going to university or into an alternative higher education course, just mentally accept that you'll be paying a bit more back in tax over the 30 years after your course finishes - as your gateway to not having to pay a single penny to attend university whilst you were actually there studying. And after the 30 year repayment window?
Well let's imagine you graduate at 21 years old and your repayments stop (no matter how much you've paid) by the time you're 51 years old. At that age, you will still be working for perhaps 15 more years...and the good news? That's the time you're most likely to be in your peak earnings...which means whether you've paid off all or only some of that loan/interest, the Student Loans Company can't take a penny more back off you...even if you still owe £20,000 of what you borrowed eons ago. You've now got that 9% of your salary that was going on repayments, all to your jolly self...to spend on whatever the hell you damn well please; a yoga retreat in Bali, that epic road trip you always planned...or perhaps even taking your son or daughter for a meal to celebrate their graduation (right, we're really getting ahead of ourselves).
paying it back
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Wonder how long it might take you to pay off your student debt, depending on the career you want? The Telegraph have created a cool table based on UCAS and SLC data to give you a rough idea, click here to view.
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£££ |
in the red: handling debt
Students have always complained about being broke. Chaucer even makes gags about it in The Canterbury Tales. Honest.
Over the last couple of decades the situation has gone from one where students faced the challenge of merely staying out of the red to one where even the official funding system acknowledges that they could graduate with around £21,000 (more like £27,000 in London) of debt.
Just how deep the debt hole will have sunk by the end of the decade remains to be seen. The average debt on graduation is currently between £15,000 and £20,000 - but take this average with a big sack of sodium chloride as the cost of living shoots up and loans get bigger and bigger and students delay paying their tuition fees until after university. Figures up to £35,00-£40,000 have been bandied around for the not too distant future - like an elephant in a chocolate factory, the average will only get bigger.
So while some students may make it to graduation without borrowing anything, most will wind up a firm five figures in the red.
Try moaning about student debt to someone with a mortgage and they probably won’t be too impressed – but, if you have a mortgage, you probably have property to show for the hole in your finances. You probably also have a salary to support your repayments. Most students have neither.
Does this sound a tiny bit negative? Well, it shouldn’t put you off. It’s only money, after all, and as the great Bob Dylan once said, ‘What’s money? A man is a success in life if he gets up in the morning and goes to bed at night and in between does what he wants to do.’
Bloody hippy. Someone go tell him that a degree’s an investment.
The good news is that it won’t be a problem if you follow some key dos:
...And steer away from a few don'ts:
Don’t let debt take over your life. It will only become a problem if you let it and ignoring red bills and letters from creditors or applying for more loans when you can’t pay off the ones you already have is just asking for trouble.
Don’t be complacent and assume it won’t happen to you. Even the meanest misers, penny-pinchers and prudent puritans are often amazed at the flash with which their bank balance transforms from healthy wealth to black hole.
Don’t get behind with bills.
Over the last couple of decades the situation has gone from one where students faced the challenge of merely staying out of the red to one where even the official funding system acknowledges that they could graduate with around £21,000 (more like £27,000 in London) of debt.
Just how deep the debt hole will have sunk by the end of the decade remains to be seen. The average debt on graduation is currently between £15,000 and £20,000 - but take this average with a big sack of sodium chloride as the cost of living shoots up and loans get bigger and bigger and students delay paying their tuition fees until after university. Figures up to £35,00-£40,000 have been bandied around for the not too distant future - like an elephant in a chocolate factory, the average will only get bigger.
So while some students may make it to graduation without borrowing anything, most will wind up a firm five figures in the red.
Try moaning about student debt to someone with a mortgage and they probably won’t be too impressed – but, if you have a mortgage, you probably have property to show for the hole in your finances. You probably also have a salary to support your repayments. Most students have neither.
Does this sound a tiny bit negative? Well, it shouldn’t put you off. It’s only money, after all, and as the great Bob Dylan once said, ‘What’s money? A man is a success in life if he gets up in the morning and goes to bed at night and in between does what he wants to do.’
Bloody hippy. Someone go tell him that a degree’s an investment.
The good news is that it won’t be a problem if you follow some key dos:
- Do borrow wisely.
- Do spend according to need rather than want.
- Do keep tabs on your bank balance.
- Do tap every available resource.
- Do get yourself a good holiday job.
Do try to get some work during holidays, so that you can pay off all or part of your overdraft – then you'll have the facility available to you once again when you begin the next term. It’s not much fun to start term in the red and counting the days until your next loan instalment clears. Prepare yourself for the unexpected.
...And steer away from a few don'ts:
Don’t let debt take over your life. It will only become a problem if you let it and ignoring red bills and letters from creditors or applying for more loans when you can’t pay off the ones you already have is just asking for trouble.
Don’t be complacent and assume it won’t happen to you. Even the meanest misers, penny-pinchers and prudent puritans are often amazed at the flash with which their bank balance transforms from healthy wealth to black hole.
Don’t get behind with bills.
SAFE AND UNSAFE DEBTS
Your student loan and your overdraft are safe debts, virtually unavoidable, and the cheapest money that money can buy.
The interest on both is very small - the overdraft is usually free while you’re a student and if you stay within your limit and the interest on student loans is only in line with inflation, so virtually nil. And you don’t have to worry about paying them back until after you’ve graduated.
However, any other borrowings are a risk. If possible, avoid taking out other loans altogether - and treat credit cards as an emergency resort.
If you run up debts and end up missing or delaying repayments, this will not be good for your future credit rating and you’ll end up like an upended Chupa Chup in a sandpit - no-one will want a lick of you.
Unauthorised debts – for example, exceeding your overdraft by writing rubber cheques or stretching the debit card a bit far – are also unsafe.
Stick to the safety zone.
The interest on both is very small - the overdraft is usually free while you’re a student and if you stay within your limit and the interest on student loans is only in line with inflation, so virtually nil. And you don’t have to worry about paying them back until after you’ve graduated.
However, any other borrowings are a risk. If possible, avoid taking out other loans altogether - and treat credit cards as an emergency resort.
If you run up debts and end up missing or delaying repayments, this will not be good for your future credit rating and you’ll end up like an upended Chupa Chup in a sandpit - no-one will want a lick of you.
Unauthorised debts – for example, exceeding your overdraft by writing rubber cheques or stretching the debit card a bit far – are also unsafe.
Stick to the safety zone.
STRESS BUSTING TIPS FOR THE POOR AND DISGRUNTLED
So how do you stop debt becoming a problem?
Debt is undoubtedly a hassle and, in fact, while you’re a student one of the main problems with debt is not that you don’t have any money, but what worrying about it threatens to do to your head.
Hopefully, after all of Push's wise advice you’ll stay in the relative clear, financially speaking - but if you are starting to suspect you might need an inhaler, remember: don't panic.
Getting into debt and not getting out isn't something you can do much about until you graduate. Nor will anyone expect you to. So don’t waste nights staring at the ceiling fretting about it.
So long as you can pay your way in the meantime, do what you can and be cool about it.
If you are having difficulties, whatever they are – drawing up your budget, getting by on what you’ve got, negotiating with your bank, filling in forms to apply for funding, worrying about debt, chasing the SLC for your loan payment – talk to your student welfare officer.
They’re usually based in either the students’ union welfare department or the university’s. Often they’ll have a specialist debt counsellor or financial advisor too.
They’ll offer guidance and, if you need it, sometimes even practical assistance – i.e. they’ve got the keys to the safe where they keep the Access to Learning Fund.
POMMIE
Where would we be without mnemonics? (Push used to know the answer to that, but couldn’t ever come up with a way to remember it.)
The central principles of a stress-free university career (at least as far as money management goes) can be expressed in the almost delightfully uncatchy acronym ‘pommie’:
PRIORITISE: Buy what you need first (e.g. food and shelter) – what you want comes second.
ORGANISE: Plan your budget, check your balance regularly and keep a record of all financial correspondence.
MAXIMISE: Make sure you’re getting all the income you’re entitled to.
MINIMISE: Keep expenditure to a minimum without depriving yourself unduly.
IMPROVISE: When you can’t afford something, be creative about alternatives.
ECONOMISE: Stick to the first five rules and buy cheaply when you can.
For want of a better reminder, stick to the POMMIE principles and remember why you’re at university in the first place – to better yourself, to improve your prospects and ultimately to embark on the career you want… money, success, blah, blah, blah. You know the script by now.
Essentially, the message is that you don’t need money to have a good time.
Students don’t stay poor forever and the loudest voices saying that students shouldn’t complain are often graduates themselves. A few years down the line, you too will probably wonder what you were so worried about.
Of course, debt and hardship is like a ripe zit on the end of your nose. While it’s there, it’s horrible – it’s as if the world revolves around it – but with the correct procedure, in a shower of pus, normality is restored.
Indeed, it’s better than that. Not only are the money management skills you pick up at university useful when you have more money of your own, but in any profession involving any contact with budgets – i.e. almost all of them – they’re as useful a skill as being able to suck up to your boss.
If you need help and advice:
Debt is undoubtedly a hassle and, in fact, while you’re a student one of the main problems with debt is not that you don’t have any money, but what worrying about it threatens to do to your head.
Hopefully, after all of Push's wise advice you’ll stay in the relative clear, financially speaking - but if you are starting to suspect you might need an inhaler, remember: don't panic.
Getting into debt and not getting out isn't something you can do much about until you graduate. Nor will anyone expect you to. So don’t waste nights staring at the ceiling fretting about it.
So long as you can pay your way in the meantime, do what you can and be cool about it.
If you are having difficulties, whatever they are – drawing up your budget, getting by on what you’ve got, negotiating with your bank, filling in forms to apply for funding, worrying about debt, chasing the SLC for your loan payment – talk to your student welfare officer.
They’re usually based in either the students’ union welfare department or the university’s. Often they’ll have a specialist debt counsellor or financial advisor too.
They’ll offer guidance and, if you need it, sometimes even practical assistance – i.e. they’ve got the keys to the safe where they keep the Access to Learning Fund.
POMMIE
Where would we be without mnemonics? (Push used to know the answer to that, but couldn’t ever come up with a way to remember it.)
The central principles of a stress-free university career (at least as far as money management goes) can be expressed in the almost delightfully uncatchy acronym ‘pommie’:
PRIORITISE: Buy what you need first (e.g. food and shelter) – what you want comes second.
ORGANISE: Plan your budget, check your balance regularly and keep a record of all financial correspondence.
MAXIMISE: Make sure you’re getting all the income you’re entitled to.
MINIMISE: Keep expenditure to a minimum without depriving yourself unduly.
IMPROVISE: When you can’t afford something, be creative about alternatives.
ECONOMISE: Stick to the first five rules and buy cheaply when you can.
For want of a better reminder, stick to the POMMIE principles and remember why you’re at university in the first place – to better yourself, to improve your prospects and ultimately to embark on the career you want… money, success, blah, blah, blah. You know the script by now.
Essentially, the message is that you don’t need money to have a good time.
Students don’t stay poor forever and the loudest voices saying that students shouldn’t complain are often graduates themselves. A few years down the line, you too will probably wonder what you were so worried about.
Of course, debt and hardship is like a ripe zit on the end of your nose. While it’s there, it’s horrible – it’s as if the world revolves around it – but with the correct procedure, in a shower of pus, normality is restored.
Indeed, it’s better than that. Not only are the money management skills you pick up at university useful when you have more money of your own, but in any profession involving any contact with budgets – i.e. almost all of them – they’re as useful a skill as being able to suck up to your boss.
If you need help and advice:
- Credit Action & Consumer Credit Counselling Service creditaction.org.uk or cccs.co.uk, 0800 138 1111
- National Debtline nationaldebtline.org, 0808 808 4000
- Educational Grants Advisory Service egas-online.org, 020 7254 6251
- Money Advice Service moneyadviceservice.org.uk, 0800 138 7777
after university
All good things will come to an end. Falling asleep in nine o’clock lectures, cheap beer, exam stress, being unable to afford a new pair of socks…
Eventually, all being well, you’ll get kitted out like an extra in Harry Potter - with a black square on your head, a cheesy grin and a scroll in hand.
After that, you might be thinking that all the hard slog is out of the way, but the problem now is that you’ll have to earn a living and start to pay back what you owe.
Some debts – such as your overdraft – you won’t be able to delay long before you start making repayments. Most banks won’t let you swan along indefinitely. They want to see their investment in you start to ripen.
As for others, mainly the student loan, the longer you put off being in a position to start making good, the more interest you’ll end up paying.
Besides, after three years of it or more, most people have had quite enough of poverty.
So try to get earning pretty sharpish. If the thought of going straight for a long-term career fills you with dread, try temping or make enquiries about jobs abroad (see Filling the Gap and Jobs Abroad). Lots of graduates take a year between finishing university and landing a permanent job, especially if they didn’t take the opportunity straight out of school or college.
If you do intend to up sticks and leave, or even wait a while before stepping up to the start line of the rat race, check first on what your bank and the Student Loans Company want you to do about your debts. You should be able to defer repayments on your student loan, but your bank may want you to come to some arrangement.
In the case of overdrafts, it’s probably best to pay off at least part of the negative numbers before you go anywhere. The overdraft facility won’t disappear just because you’ve pulled your account into credit and a nice soft financial cushion can be as much of a lifesaver when you’re miles from home as when you were struggling to make ends meet until the end of term.
Eventually, all being well, you’ll get kitted out like an extra in Harry Potter - with a black square on your head, a cheesy grin and a scroll in hand.
After that, you might be thinking that all the hard slog is out of the way, but the problem now is that you’ll have to earn a living and start to pay back what you owe.
Some debts – such as your overdraft – you won’t be able to delay long before you start making repayments. Most banks won’t let you swan along indefinitely. They want to see their investment in you start to ripen.
As for others, mainly the student loan, the longer you put off being in a position to start making good, the more interest you’ll end up paying.
Besides, after three years of it or more, most people have had quite enough of poverty.
So try to get earning pretty sharpish. If the thought of going straight for a long-term career fills you with dread, try temping or make enquiries about jobs abroad (see Filling the Gap and Jobs Abroad). Lots of graduates take a year between finishing university and landing a permanent job, especially if they didn’t take the opportunity straight out of school or college.
If you do intend to up sticks and leave, or even wait a while before stepping up to the start line of the rat race, check first on what your bank and the Student Loans Company want you to do about your debts. You should be able to defer repayments on your student loan, but your bank may want you to come to some arrangement.
In the case of overdrafts, it’s probably best to pay off at least part of the negative numbers before you go anywhere. The overdraft facility won’t disappear just because you’ve pulled your account into credit and a nice soft financial cushion can be as much of a lifesaver when you’re miles from home as when you were struggling to make ends meet until the end of term.
employment
Towards the end of your student career, the whole employment issue will raise its neatly coiffured head.
Your university’s careers service will help. They differ in size, effectiveness and what they’ll offer to do for you. but you’ll want to mastermind the hunt for yourself anyway.
Job Fairs and Graduate Recruitment Fairs will most likely become a regular fixture in your life. Employers have stands where they try to convince you to work for them and you try to convince them to employ you. Despite how it sounds, people and jobs don’t pair up quite as easily as you might think.
The name ‘fairs’ makes them sound like summer fêtes and, sure enough, they’re most prolific in June and July. But that’s where the similarity ends. There’s not a swing boat or tombola in sight. If you’re after a rural metaphor, they’re more reminiscent of cattle markets, only most of the livestock are wearing suits. Strangely enough, the cattle theme continues – these fairs and mini-fairs are known at individual universities as the ‘milk round’.
There are general fairs for jobs across the board and specialist ones for different industries or fields. Each offers seminars and advice, and they provide a unique opportunity to meet hoards of potential employers all in a flock.
Make an irresistible CV and take plenty of copies along with you. Dress up smartly and sell yourself. Be prepared for an interview on the spot.
Even if you don’t end up with a job, you can scout the territory, find out about different jobs, different companies and how to get in to what you want to do. You can also network – get names, numbers, contacts – and pick up on the leads later.
You can find out what fairs are where in the Education and Careers section of the Independent on Thursday or the Graduate (‘Rise’) section of The Guardian every Saturday.
After graduating, if you’re not walking straight into a job, take the opportunity to pick up some office and IT skills or to improve on what you’ve got.
If you’re not completely sick of education, you could even enrol on a short training course. There may be yet more costs involved, but there are a few schemes to help out. See waytolearn.co.uk for more information.
If you’re lucky, you may even find an employment agency that’s willing to give you some free, basic training – even if it’s nothing more than improving your typing speed or introducing you to a software package. Don’t knock it. Keyboard skills and computer literacy are often a decider when it comes to getting a job. They also make life easier once you’ve got one.
Your university’s careers service will help. They differ in size, effectiveness and what they’ll offer to do for you. but you’ll want to mastermind the hunt for yourself anyway.
Job Fairs and Graduate Recruitment Fairs will most likely become a regular fixture in your life. Employers have stands where they try to convince you to work for them and you try to convince them to employ you. Despite how it sounds, people and jobs don’t pair up quite as easily as you might think.
The name ‘fairs’ makes them sound like summer fêtes and, sure enough, they’re most prolific in June and July. But that’s where the similarity ends. There’s not a swing boat or tombola in sight. If you’re after a rural metaphor, they’re more reminiscent of cattle markets, only most of the livestock are wearing suits. Strangely enough, the cattle theme continues – these fairs and mini-fairs are known at individual universities as the ‘milk round’.
There are general fairs for jobs across the board and specialist ones for different industries or fields. Each offers seminars and advice, and they provide a unique opportunity to meet hoards of potential employers all in a flock.
Make an irresistible CV and take plenty of copies along with you. Dress up smartly and sell yourself. Be prepared for an interview on the spot.
Even if you don’t end up with a job, you can scout the territory, find out about different jobs, different companies and how to get in to what you want to do. You can also network – get names, numbers, contacts – and pick up on the leads later.
You can find out what fairs are where in the Education and Careers section of the Independent on Thursday or the Graduate (‘Rise’) section of The Guardian every Saturday.
After graduating, if you’re not walking straight into a job, take the opportunity to pick up some office and IT skills or to improve on what you’ve got.
If you’re not completely sick of education, you could even enrol on a short training course. There may be yet more costs involved, but there are a few schemes to help out. See waytolearn.co.uk for more information.
If you’re lucky, you may even find an employment agency that’s willing to give you some free, basic training – even if it’s nothing more than improving your typing speed or introducing you to a software package. Don’t knock it. Keyboard skills and computer literacy are often a decider when it comes to getting a job. They also make life easier once you’ve got one.
a balanced budget
The reason they call it a bank balance is because it’s a question of getting the scales to tip the right way.
Push has roughed out the range of possibilities but, ultimately, your finances are your own. Not only will your income and costs be unique but, much as Push would love to play personal exchequer to each and every student in the land (yeah, right), it’s important to work out your budget for yourself and know it inside out.
THE RANGE OF INCOMES
Your loan is a big chunk of what comes in, but how big it – and indeed your whole income – is depends largely on your parents.
That is, what they’re supposed to give you, whether they give it to you or whether they give you more.
Beyond that, you need to make the call about what you want out of student life. If you simply want to study and aren't too bothered about a social life, you'll probably scrape by on your overdraft and student loan (and any grants and bursaries, if you’re one of the lucky ones), without having to supplement your income with work. But, let’s face it, after a fortnight of that your good intentions will probably pop down to the student bar and take you with them.
Those students with a fiercely independent streak (or a severe shortfall in their budget) will probably seek term-time work as soon as they start their course. It has to be said that earning your own money gives you a greater sense of financial freedom and takes the strain off of your parents, while giving you that all-important work experience.
However, it’s even more important to ensure that you never compromise on your studies. Maximise your disposable income as much as possible – but if you feel you are taking on too much work, you will have to look at minimising outgoings instead.
This is what budgeting is all about - if you haven’t got the funds coming in, you should aim to cut down on what you’re spending.
But let’s take a look at the range of annual incomes. To hit the highest income outlined in the table below involves qualifying for the full grant and doing paid work for up to 15 hours a week during term-time.
Also bear in mind that there are so many ifs and buts involved in these figures that they’d read like a stammer if Push bothered with them all. Have a scoot round the rest of the finance section if you're still stuck.
- Making a budget
Push has roughed out the range of possibilities but, ultimately, your finances are your own. Not only will your income and costs be unique but, much as Push would love to play personal exchequer to each and every student in the land (yeah, right), it’s important to work out your budget for yourself and know it inside out.
THE RANGE OF INCOMES
Your loan is a big chunk of what comes in, but how big it – and indeed your whole income – is depends largely on your parents.
That is, what they’re supposed to give you, whether they give it to you or whether they give you more.
Beyond that, you need to make the call about what you want out of student life. If you simply want to study and aren't too bothered about a social life, you'll probably scrape by on your overdraft and student loan (and any grants and bursaries, if you’re one of the lucky ones), without having to supplement your income with work. But, let’s face it, after a fortnight of that your good intentions will probably pop down to the student bar and take you with them.
Those students with a fiercely independent streak (or a severe shortfall in their budget) will probably seek term-time work as soon as they start their course. It has to be said that earning your own money gives you a greater sense of financial freedom and takes the strain off of your parents, while giving you that all-important work experience.
However, it’s even more important to ensure that you never compromise on your studies. Maximise your disposable income as much as possible – but if you feel you are taking on too much work, you will have to look at minimising outgoings instead.
This is what budgeting is all about - if you haven’t got the funds coming in, you should aim to cut down on what you’re spending.
But let’s take a look at the range of annual incomes. To hit the highest income outlined in the table below involves qualifying for the full grant and doing paid work for up to 15 hours a week during term-time.
Also bear in mind that there are so many ifs and buts involved in these figures that they’d read like a stammer if Push bothered with them all. Have a scoot round the rest of the finance section if you're still stuck.
- A sample budget
Here’s one way of doing it. Work out what you have coming in. Work out the costs of essential items. See what’s left. Split that appropriately between your other costs – the ones where you could economise if you really have to.
By way of example only, that’s what we’ve done here. It’s a budget for a fictional first-year student, whose parents earn £45,000 a year and who intends to study outside London and live in a shared house (for ten months from September to the end of June).
His/her academic year is made up of three terms of ten weeks each (30 weeks over the year) – the rest of the time, s/he’ll go home. Of course, s/he – let’s say he’s a she, shall we? In fact, let’s call her Penny, er, Penny Pinching – Penny can exercise some control over some of the essential costs and some of the variable costs aren’t altogether avoidable, but the breakdown helps.
Now, sit back, relax and let Push take you through what Penny did next
PART 1: INCOME
This is what Penny reckons her income will be.
Presumably, she’s already applied to her LEA and been told what she can expect by way of support (a loan for her tuition fees and most of the full loan for living costs), and what she should expect from her folks (£549).
Technically the tuition fees loan will be paid to the university and she won’t be able to spend a penny of it on anything other than fees. However, she’s included it in this budget to give her a better idea of the kind of debt she’s likely to come away with at the end of her studies.
Presumably, she’s also talked to her parents about things and the amounts she’s put down are based on safe assumptions. That bar work, however, might be a problem. If Penny knows that she’s got the job already, then she’s safe. If not, then it may be a bit risky to suppose that there’ll be any work going.
Chances are that there’ll be at least a few weeks in the summer term when Penny can’t work at all because she needs to focus on her exams so the total from work will drop. So with this in mind she calculates £1,200 for the bar work. She’s reckoned on six weeks when she won’t be earning. She may make up some of that with vacation jobs or occasional overtime, but she’s right not to count on it.
PART 2: ESSENTIAL COSTS
Next, Penny worked out what she’ll need for costs that she can’t do much to lower. Her rent, for example, can't be reduced in the same way that her weekly shop can. It is what it is.
Penny's travel shouldn’t be too bad because she’s on campus, but she needs to go into town to do her weekly shopping and, since she’s not paying for any rent over the vacations, she’ll need to go home at the end of each term.
As it happens, she thinks she won’t need that much for food and hopes to keep bills to a minimum – but when making a budget it’s best to assume the worst. At least that way you’re prepared for it if it happens and, if it doesn’t, you’ve got money to spend on something else (or not to spend at all and therefore end up in less debt).
She’s also spread the costs appropriately. She’s allowed more for bills for the first two terms, when the weather’s colder and Penny will need the heating on more. And she's shoved all the cost of insurance right up the front when she’ll actually have to pay it.
Meanwhile, she’s spread her rent unevenly between the three terms because she’s allowed enough rent money to take her through the short winter and spring vacations too.
Having worked out her costs in Part 2, she’s calculated the maximum remainder she’ll have left over. Of course, in the income section, she had to factor in an overdraft from the bank of £1,000. If she can get away with it, she’d rather not borrow that much. That’s why this is a maximum remainder.
PART 3: VARIABLE COSTS
The variable costs are the ones where, if necessary, Penny will have to find a way of economising. Even her academic costs may have to be cut. She’ll need to spend a certain amount on pens, paper and so on – but if it comes to it, for books, she’ll just have to spend longer in the library rather than buy her own - or, copyright laws withstanding, photocopy them.
She’s worked out how much to give herself under different headings and allocated each heading a percentage of the remainder. She’s chosen these percentages for herself, based on what they’re likely to cost and the priority she puts on them.
By only giving 12.5% to academic costs, it doesn’t necessarily mean she’ll ignore her studies, just that Penny thinks they won’t cost her as much as, say, entertainments. She’s also put most of the costs in the first term when, presumably, she’s planning to do most of her book buying.
She’s spread out other costs unevenly over the year too, to reflect when she’s actually going to have to shell out. For example, she’ll have to do her Christmas shopping at the end of the first term, so she’s allowed £35 more than the rest of the year.
She’s done something really sensible – that’s our Penny for you – by giving herself nearly £250 emergency money.
She’ll try not to touch that, but it means she won’t automatically blow the whole schedule if she needs to rush home unexpectedly, or loses her job, or has her bike stolen and needs to pay an excess on her insurance, or aliens land and make her give them her lunch money.
If, at the end of the year, she hasn’t used her emergency money, she can put it towards the holiday she clearly wants (after all she’s given it a heading even though she seems to have worked out that she can’t afford it) or she can just be grateful she didn’t have to borrow up to the max that year.
CASHFLOW
Under ‘entertainment and socialising’, Penny Pinching put a subheading for Freshers’ Week. In this she allowed herself an extra forty quid to have a good time - in other words, double her regular weekly ents allowance.
But it looked like she hadn’t allowed herself anything else for settling in – to cover all the stuff she’ll discover she forgot to bring with her and for a big splurge at the supermarket to get her kitchen cupboards off to a good start.
That doesn’t sound like Penny. Not our Penny who is sensible in a way that only fictional people can be.
Sure enough, she has thought about it. Apart from breaking it down into three terms, Penny has also worked it out for every week of the year. Perversely diligent person that she is, she’s even done a spreadsheet on a computer.
Her weekly allowance for food, for example, is £40 on average over the year, but if you were to look at her cashflow spreadsheet, you’ll see she’s allowed herself an extra fiver each week for the first four weeks and one pound less a week for the second two terms.
This weekly breakdown tells her at the end of any week in the year what her bank balance should be. She can then compare it with what it actually is and decide immediately what to do.
If she’s over budget on her ‘food’ heading, say, she either has to just make do on the food she’s already got for that week – which isn’t satisfactory if it means missing meals – or find somewhere else to make a saving. Probably one of the variable cost items. In other words, she decides she can’t afford to go out tonight.
Alternatively, she can ask her boss at the pub if she can work extra hours.
If, however, she’s under budget, she might decide she can afford to treat herself to a takeaway tonight, or put money aside for that holiday. (We understand she intends to go to Switzerland, home of banking – not to mention the cuckoo clock).
By keeping a check on her cashflow, she’s not only counting the money out, but counting it in.
Most students find budgeting very difficult because their money arrives in two or three large chunks during the year, whereas outgoings are roughly constant (and relentless) over every term.
Penny knows when to expect big movements either way and she has an early warning system long before any problems crop up.
FLEXIBILITY
Penny also has a little notebook in which, for the first term at least, she intends to write down every penny she spends. That way she can work out how she’s really doing with her budget headings.
Realistically, she knows she won’t keep track when she’s out for a night on the tiles, but that doesn’t matter. Just so long as, the next morning, she knows what she spent in total. The whole lot goes down under the entertainments heading as ‘night out £9.24’.
Every couple of weeks, she can tot up what she’s spent on what and compare it with her budget and cashflow.
She knows perfectly well that some of her estimates are going to be way out. By monitoring what she spends closer than a cat watching marjorie the goldfish, she’ll be able to adjust her budget as she goes along.
Having put so much effort into the budget in the first place, this may seem like sacrilege – but to Penny, it’s part of the whole point. If the budget’s not working, rather than live a life of misery because you can’t afford to go out when you’re £5 over on your food, just juggle the figures.
But Penny shouldn’t have to. She even has money for emergencies.
Nevertheless, while you can expect the unexpected, you can’t always predict exactly what shape it’ll come in. For Penny, as for every student, there are imponderables – and there’s no such thing as a typical student budget that will always work for everyone.
If she’s over budget, she looks for somewhere she’s under budget. And if she can’t find anything, she works out where she can get more money – more hours working at the pub, a heart to heart with the parents or even asking the bank.
If Penny takes her budget and cashflow along to a meeting with the bank, they’ll extend her overdraft, no problem. Even if something’s gone seriously wrong and she’s in a monetary mire, they’ll see that she’s the kind of person who’ll find her way out in the long-run, through careful financial planning.
Going as far as Penny may seem extreme, but it’s not actually as much work as it looks, and it’s not so far from what should be basic budgeting procedures.
Even with all her efforts, according to her own calculations she’s going to end up more than £20,000 in debt at the end of her three-year course.
At the very least, you should do a budget like Penny’s for yourself and keep revisiting it until it works. Then revisit it again every time you get major new information (such as finding part-time work).
And then look at it at least once a month while you’re at university to see how you’re doing. Stick it on the wall above your desk. If necessary, make changes to keep it current.
And remember that it’s like a revision timetable – not just a chart you spend hours colouring in and then ignore prior to last-minute panic. It’s a relevant guide to what you can and can’t spend if friends, for example, ask you to join them for a drink. If you’ve spent your weekly entertainment allowance already, unfortunately the answer is, ‘no’. Everyone has to give it a miss sometimes. Study instead.
There’s nothing crazy in any of this. We're just talking about looking after your finances. That's a skill that everyone has to acquire sometime – even ridiculously wealthy people. How do you think they became wealthy in the first place?
It’s a bit of a deep-end experience if you’re learning to budget when you’re really strapped, but if you want to get anally retentive about the process, it’s the best time to do it. And remember, it’s better to be anal than sorry.
- Priorities
It’s no fun living on Marmite sandwiches and Tesco Value orange squash for a month, after squandering the last of your cash on a couple of over-indulgent Saturday nights. You’ll realise with the infallible clarity of hindsight that it just wasn’t worth it (however much fun it was at the time).
Doing a preliminary budget is all very well, but sticking to it is the difficult bit. In theory, it’s easy – in practice, it’s a different matter. Despite your best intentions, you may still find yourself up to your neck in debt, wondering how the hell you got there.
Don’t worry about being in debt – that’s normal. Worry about being in too much debt or being in debt too soon. Some debts are necessary. Others you can do without.
As the debts get bigger, don’t panic or give up trying to keep them to a minimum. Even if you find, despite your best efforts (or even because of a lack of any effort), that you’re in a debt ditch, there are ways of climbing out. And, for what it’s worth, there are thousands of others in exactly the same situation.
If you can’t pay for tedious, but compulsory, house-related costs or if you get behind on your rent, your housemates may well start seeing you as a liability. You can’t expect others to bail you out or lend you the money to cover your share of the bills.
The key is to prioritise. See that the necessities are covered before you get on with the fun bits of student life - fancy dress outfits for a night down the SU, seeing your favourite band, a curryathon with the housemates.
- Ideally, what comes in is heavier than what goes out (unless it’s paper coming in, copper going out – but you get the idea). As a student, unfortunately, your expenditure almost invariably squats heavily at one end of the scales, as your income is lightly perched at the other. It’s like pitting a stick insect against a walrus.
This is not, however, any reason to give up. Indeed, it’s all the more reason to put the walrus on a diet and force feed the stick insect Crispy Cremes.
The two keys to student survival are planning and prioritising. Know what you have to spend – even if it’s borrowed. Know what your spending priorities are. Maximise what comes in. Minimise what goes out. And be extremely pessimistic about both.
To do this, you need to work out how much you can afford to spend on any one thing and then stick to it. Or if it’s not possible, either make cutbacks elsewhere or somehow get hold of more money.
However, you can’t do this unless you plan. You can’t know what you can afford until you’ve worked out what you’ve got. And you can’t make cutbacks until you know the figure you’re cutting.
It’s all just a matter of balancing the books – a tedious business at first, but once you’ve done it, the whole being a student thing seems a lot less like living under a rock covered in mould. You can start to enjoy it – student life that is, not balancing the books.
Feeling secure and confident about your finances will boost your overall morale and help your studies (no, really). Although you’re unlikely to ever be rich while you’re a student, so long as you can make ends meet, you’ll have a much more relaxed and stress-free existence.
And just because you’re not overdrawn up to your neck, it doesn’t mean you’re not in trouble. You may have costs lurking round the corner like a man in a mac. Planning helps you see round the corners - and avoid said flasher.
If the whole lolly layout goes doolally, you need to know quickly, before it has a seriously detrimental affect on your studies and your health – which it will if you’re not able to seek help before it gets too serious. There’s nearly always a straightforward solution to every problem, if it is dealt with in time, so don’t just ignore it and hope it’ll go away. (See 30 steps to solvency below).
30 steps to solvency
- Work out your budget and get an idea of your cashflow situation before you even pack to go to university. Do it as soon as possible. Preferably sooner.
- Economise right from the off. If you blow big bucks at the beginning of term, your fast and loose spending will only leave you miserable and bored at the end of term.
- Don’t buy anything you don’t need if you haven't got enough loot for the things you really do need. Paying your rent on time and having food to eat are more important than the latest PS3 game or harem pants - no matter what Vogue says.
- Keep your budget under regular review and make adjustments for any costs you miscalculated.
- If you need a little extra to tide you over, try to get a job if possible, but don’t assume when budgeting that you’ll be able to get one immediately.
- If you’ve got a job, but you’re still feeling the pinch, try to get a few extra shifts but not at the expense of your course.
- During a ‘typical’ week at university (or, even better, a whole month or a term), keep a record of everything you buy (by cash, card, direct debit and cheque) and how much it costs – pints, snacks, cab rides, fetish outfits, etc. Cheque stubs, receipts and bank statements can all help you draw up a comprehensive record of total expenditure.
- It may seem like a hassle, but you can then use this information to help you draw up a realistic budget. The little things you don’t think twice about buying are often overlooked, and after the big birds like fees and rent have flown from the nest egg, they suddenly seem a whole lot bigger.
- Anyone on a low income should avoid anything with high interest payments. That means you. Big monthly repayments and a high annual percentage rate spell big trouble. Paying off old debts with new ones generates a vicious cycle. You’ll end up with mounting mountains of interest and interest on the interest, ad nauseam.
- Only have the heating on when you really need it – even in winter just a few hours in the morning and a few hours at night will see you alright. Other energy-saving rules: have showers instead of baths, always turn the light off when leaving an empty room, only fill the kettle as much as you need to, don’t leave the telly on standby.
- Share cooking and shopping with housemates and split the bills. Don’t fuss about who’s eating more. You’re all subsidising each other anyway because it works out cheaper than buying for one.
- Buy fruit and veg from market stalls, not the supermarket.
- You may be covered by insurance, but minimise the risk of having all your precious things nicked in the first place by keeping all expensive-looking items away from the windows and always lock internal doors where you can. Insurance premiums will be lower if you have a personal lock on your bedroom door.
- Get a friend to cut your hair – preferably one who knows what they’re doing. Alternatively, find your nearest hairdresser and ask if they want any models. You’ll only pay about £5 and get just about whatever haircut you want. For a bit extra you can get colour and perming too.
- Check out ‘bargain basement’ shops such as Poundland. You can get all sorts of necessities in there – household cleaning products, shampoo, lightbulbs, notepads, novelty pens, etc, all for… er, a pound. Some stuff is actually less than a pound elsewhere, as long as you don't mind your Timotei with a Greek label, Savers is good for cut-price toiletries. Be warned though – these places are full of tat you don’t need and not everything’s a bargain.
- Be on the look-out for special student nights at clubs, pubs, cinemas etc. Carry your NUS card with you everywhere – it can get you so many discounts, it could be your most valuable piece of plastic.
- Pick up free condoms from your local family planning centre or the university health centre (and use them).
- Make calls and surf the net during off-peak times only. Usually after 6 or 7pm and at weekends, but check.
- If you must have a credit card, choose one that offers money back (instead of points for freebies). And use it as if it were made of glass - not unless you know you can pay the monthly bill in total. Cut it up if you find you can’t.
- Don’t spend all your money on drink and drugs. If going out on the piss, meet up round someone’s house first and do most of your drinking there. It’s cheaper.
- Go out in groups of four or five (or more). Get in a round each (or buy your own drinks). Don’t take more cash than you’re willing to spend and only take your cashpoint card for emergencies. Swap it with one of your (sober) friends for safe keeping. (Don’t tell them the PIN.) Leave enough money for getting home. When you’re all drunk and raucous enough at the end of the night, if you have to catch a taxi, pile in together and split the cost.
- Where possible, apply for your student loan early and have it put into your account in three instalments throughout the year.
- Pay regular bills automatically by direct debit or standing order. Not only does this avoid the problem of ignored bills going red and then the electricity strangely cutting out, but you usually also get a discount. Keep track of what’s coming out of your account each month and when - take it into account in your budgeting and don’t believe the balance the cash machine tells you if a payment’s due.
- Keep a finance file with all your bank statements, bills and letters from the SLC and the bank. That way, you’ll know where to find what you need when.
- Club together with mates on the same course to buy all the main texts between you and share them on a rota basis. Definitely one to try if your university library is a bit thin on the shelves.
- In a perfect world, your overdraft facility would only be a last resort. In this world, you’ll almost certainly need at least some of it. If you’re having trouble sticking to your agreed limit, talk to your bank manager or student adviser immediately. Don’t risk getting a snotty letter for going over your limit and hoping nobody will notice – they will notice and that snotty letter will come, complete with fine.
- Always ask in high street stores, taxis, cinemas, theatres museums – just about anywhere, in fact – if there’s a student discount. They’ll rarely volunteer the information without being asked.
- Don’t rely on your next loan cheque to pay off what you already owe. You’ll need it for your rent and food next term, so what’ll you do then?
- Don’t get stressed out over your finances. You’ll only make it worse. A calm approach with good planning will see you alright. You’ll be in debt, but, hey, so’s everyone.
- The Access to Learning funds exist as a safety net for those who are experiencing problems. Ask if you need help – you shouldn’t have to suffer in silence if your situation has got to the stage where you are depriving yourself. Try asking, even if you don’t think you’ll get anywhere. The worst they’ll do is give you free advice.