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Manage your money properly practical debt advice

Students are offered the best type of borrowing available in the shape of the student loan. Manage your money properly, and debt won’t be an issue when you leave.

Understanding interest rates is a crucial part of getting the best deals in finance. If you’re unsure of the basics, or your knowledge is a bit patchy, take a look at my Beginners’ Guide To Interest Rates.
Manage your money properly and debt won’t be an issue when you leave
The right type of borrowing
In first place
The official student loan The Student Loans Company (SLC) should obviously be the first place you turn for borrowing. Seldom will you be offered such good rates on a loan; interest repayable currently stands at 2.4%.  In fact, even if you don’t need this loan, it’s worth taking out anyway, then whacking into a high interest savings account. Once you’ve paid back what you owe at the end of your study, you can keep the interest. You earned it, after all. For full information on student loans in the UK, read my full Everything you ever wanted to know about Student Loans & Grants! article.

In second place
Student bank accounts Bank managers love students. From their point of view if they can get your custom now, chances are that you’ll stick with them when you’re (hopefully!) earning some decent money on the back of your degree. All banks should offer you a sizeable interest free overdraft, and many will try to lure you in with free gifts. Consider what you need carefully, and choose the bank that offers the best deal for you- don’t just stick with the bank you’re already with for convenience.

At your University/College and Students Union
Grab other grants. If your tuition fees are the full £3,000 and you're eligible for an entire Maintenance Grant, your uni will have to give you a £300 bursary (which doesn't have to be repaid), though actually it may pay out more.  Students suffering financial hardship may get access or hardship funds; there is no one definition for ‘hardship' so if you feel you need it, apply! Many, if not all UK Universities will be able to offer you interest free hardship loans to tide you over if you don’t qualify for the free cash.

It’s also worth looking out for the ALF, or Access to Learning Fund. This is a bursary which can be claimed by most UK students with full student loans, but the biggest payouts go to those from the least privileged backgrounds. To apply, you’ll need to fill in a form detailing your expenditure (usually backed up by documentary evidence in the form of bank statements), and the reason you’re applying for the money. You’re most likely to get a large award in your final year of study, but there’s nothing to stop you applying every year.

Also try the university's welfare department; student parents, those with disabilities, or other special circumstances may receive extra cash and those studying medicine and related subjects or new teacher training students also have payments available. Furthermore, the Students' Union may have its own independent hardship fund, so it’s worth giving that a try too.

Scholarships for everyone.
Whether you're short of cash or not, there are bags of scholarships for academia, sports, hobbies or even just for being the child of an airline pilot.  There are some very bizarre ones out there. Make sure you check.

Use the Scholarship Search website, or go to a local library for a wider range of grant directories.  The Educational Grants Advisory Service also offers info on alternative funding, including educational trust funds.

Wise Up
I’ve collaborated with the Department for Education to produce a full PDF guide to student finances. Originally intended for parents, it’s free to download, and full of tips to keep your finances in check while you concentrate on getting that all-important degree.

Download my PDF guide to student finance

The interest-free overdraft is a good deal; in fact, it constitutes even cheaper borrowing than the student loan in the short term. Unfortunately, as soon as you graduate you’ll start paying interest on what you owe: that’s why it’s in second and not first place.

Read my full Top Student Bank Accounts article to see what the major players are offering this year.

In third place, and to be avoided
All other types of borrowing Anything charging a commercial rate of interest (ie around 5%), such as credit cards or bank loans should be avoided. If you don’t have an income you won’t be able to make sufficient payments back, and compound interest will make them very expensive in no time at all.

Related links
moneysavingexpert.com

 
Martin Lewis
moneysavingexpert.com

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