27th June 2013 at 11:03am
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There are many apocryphal stories circulating the internet concerning university students who have spent their loans in double quick time.
Dubious though some of the stories are, there’s no smoke without fire. Handing over what is, to many 18 year olds, an unfeasibly large amount of cash is a temptation too great for some to resist.
1 in 6 students spend their loans within a month of getting them.
According to research from Vouchercodes, 1 in 6 students spend their loans within a month of getting them.
So, with the June student loan application deadline looming (30 June for funds to be in place by the start of the new term in September) I thought it appropriate to take a look at some of the ways you can help your son or daughter manage the challenging obstacle course of university, whilst remaining solvent.
A good starting point is to try and work out how much your son or daughter will need for Uni. Of course, you can do this the old fashioned way with pen and paper, but I found this really useful online budget calculator that you might like to try.
Of course, working out what you need doesn’t necessarily mean that’s what you’ll actually get, so students still need to set budgets and track their spending. To help with that, here’s a nifty free app that’s well worth a look. It’s called The Spendometer, it works with most smart phones and it’s a great way to keep a note of what you’re spending, as you spend it. You can download it, free of charge, here .
Is avoiding taking out a student loan an answer?
Another answer is to avoid taking out a student loan altogether. But that means your children will need access to a different funding source: most likely, the Bank of Mum and Dad. Let’s face it, interest rates on savings aren’t the greatest just now, so, if you have the money, you could consider lending your kids the money at the same rate as SAAS of the Student Loan Company (or even below, if you’re feeling generous) and maybe cut them some slack while they’re still finding their feet at graduation time.
Or if you’re in the more fortunate position of your child still being a few years away from leaving school, perhaps there’s time to avoid the issue altogether by starting to save to help them through to graduation without them having to borrow.