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How Much Money Should Parents Give University Students?

How Much Money Should Parents Give University Students?

by Newcastle University

Part of the student experience for your son or daughter is learning how to live independently, pay their bills, and manage their money.

But what if they need financial help while they are studying? How much should you contribute? 

Student Finance

First, it’s important to understand that eligible UK undergraduate students can apply for loans to help fund the cost of their study and living expenses.

In England, these loans are available through Student Finance England, with a different application process for students from Scotland, Wales and Northern Ireland.

Broadly speaking, most undergraduate students apply for two different types of loan:

  • Tuition Fee Loan, which covers tuition fees and is paid up-front, direct to the university
  • Maintenance Loan, which helps pay living costs, such as accommodation, food, travel and any course-related costs not covered by the tuition fee. It is paid directly into the student’s bank account.

Both loans have to be repaid after the student has finished or left their course, and their income is over a certain amount.

Unlike the Tuition Fee Loan, the Maintenance Loan is means-tested, so the level of funding a student receives will depend on their parents’ income, as well as where they plan to live and study.

If there’s a shortfall between the amount of Maintenance Loan a student receives and their living costs, they have to cover this themselves through savings, scholarships, part-time work, or – most often – the bank of mum and dad.

And that brings us back to the original question: how much money should you give your son or daughter to support them at university?

 

How much money should parents give university students

Unfortunately, there’s no straightforward answer to this, but there are a couple of key things you could discuss with your son or daughter that might help you decide:

 

How much do they need to live on?

Encourage them to be realistic when estimating this and start by factoring in the basics – the cost of thier accommodation at university, any utilities they may have to pay for, food, laundry, insurance and course materials.

Next, allocate an amount for socialising. Although things are a little different at the moment because of Covid-19, socialising is a big part of the university experience. So, include cash for nights out, university club or society fees, and money to cover any social events these groups might host.

And don’t forget expenses such as haircuts, clothes, mobile phones and travel costs for when your son or daughter wants to come home and while they’re at university.

 

How to budget

Once your son or daughter knows how much is coming in from their Maintenance Loan and how much cash is likely to go out, you can talk to them about budgeting.

Maintenance Loans are paid in three big instalments so they’ll need to be prepared for this, but simple steps, such as setting a weekly spending allowance, can keep their cash under control. Thinking carefully about what they spend their money on, planning ahead for any big expenses and checking their bank account regularly, can also help them avoid any nasty surprises.

Since one of their biggest outgoings is likely to be on food, it’s also worth teaching them to cook – home-cooked meals and packed lunches aren’t just healthier for them, they’re also easier on the bank balance.

Other top budgeting tips include signing up for a student bank account with a competitive interest-free overdraft and making the most of student discounts, particularly on travel costs.

 

How to make up the shortfall

By this point, you should know how much of a cash shortfall your son or daughter could be facing and now it’s a question of how to plug that financial gap.

If you’re in a position to help them financially, that’s fantastic. They can also contribute – many students take on part-time or vacation jobs to make a little extra cash..

At Newcastle, our award-winning Careers Service offers lots of help and advice on finding part-time jobs, while a Jobs on Campus scheme recruits a pool of students each year to undertake a range of short-term jobs across the University. 

Remember, part-time work isn’t just about making extra cash; it’s also a way for your son or daughter to gain work experience, develop valuable skills and meet new people. And it looks great on their CV, too, demonstrating to prospective employers they’re organised, focused, willing to work and determined to succeed.

Depending on your personal circumstances, your son or daughter may be eligible for additional financial help, such as a scholarship or bursary. Charities and educational trusts also offer funds for students, so it’s worth doing your research.

Newcastle is a student friendly city with a low cost of living, so clever budgeting can help your son or daughter make their money go a long way. But it’s still important you manage their expectations now about how much money they’ll have to spend as a student, as well as how much of a parental contribution you can make, and what they can do to ease their cash flow – it could avoid problems later on.

We hope you’ve found this blog useful. If you’d like to find out more about student finance and the support that’s available, check out the financial support section on our website.

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