How to talk to your parents about student finance

If you’re heading off to university, your parents or carers might be concerned about the costs of university and student life. We’ve got some conversation starters and actions you can take to let them how student finance works and to show them you’re responsible enough to budget your money.

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1. Explain the payment and repayment process

When you apply for student finance, you’ll be able to apply for the tuition fee loan and the maintenance grant. The tuition fee loan pays for your course fees whereas your maintenance loan is for accommodation, travel and any additional costs.

Reassure them that the tuition fee loan is paid directly to your university, so you don’t need to worry about making your payments on time or spending the money on other things. The maintenance loan will be paid directly to you in three payments during the academic year. This makes it much easier to budget instead of receiving one lump sum at the beginning of the year.

Once you graduate, you’ll only start repaying your student loans when you earn above £25,000 per year. Even then, you’ll only repay a small amount. For example, if you earn £30,000 a year, you’ll repay £450 per year.*

2. Prepare them for the student finance application

If you’re applying for student finance, then your parents or carers will need to provide some additional information about your household income.

Prepare them by letting them know they’ll receive an email with a link to submit their household details. They’ll need to create an account, provide their National Insurance Number and their income for the previous tax year.
Emphasise that this is important and will mean that you receive your student loan on time. It might be a good idea to fill in the forms together so that you know they are completed correctly and that you’ll meet the deadline – this is a great opportunity to start having conversations about money at university!

3. Breakdown the costs

Start working out now how much everything will cost you at university. Budget for your accommodation, travel, food, social life and any other extras you might need and show your parents how you’ll afford these each month.
Some costs such as accommodation or your train ticket might seem expensive to them, so show them how you’ll save money elsewhere. For example, find some budget meals you’ll enjoy or the discount you’ll be able to get with a student railcard.

4. Talk about your plans for a part-time job

If you’re planning on working whilst you’re at university, your parents may be concerned that it will take the focus away from your studies. Reassure them that it’s very normal for students to have a part-time job and work one day or a few evenings a week.

Plus, universities have flexible student roles that allow you to pick up work when you have more free time and decline work if you have a deadline coming up. At university, we understand that your degree comes first, so university-based roles usually have a limit on how many hours you can work per week.

Having a part-time job is also a huge addition to your CV and a way to build different skills outside of your course.

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5. Explain student banks and overdrafts

Your parents might hear the word overdraft and think it’s something to be avoided at all costs, however, student overdrafts are a little different. If you open a student bank account, you’ll have access to a 0% overdraft, which does give you a little more flexibility if you overspend.

This means that if you have £100 in your bank account but you spend £200, your overdraft will show as -£100 instead of the payment being declined. You won’t be charged anything for using this overdraft. Once more money is put into your bank account, the overdraft will be paid off. Be aware that student overdrafts do have limits and you will be charged if you go over the limit, as well as any spending on that card being blocked.

6. Show them you’re ready to handle your finances

If you have any savings, then show your parents or carers that you’ve been able to save up an emergency fund for uni, so there’s some money to fall back on if you need it.

You can also start your budgeting now and prove that you know how to be a money-savvy student. Start using a budget planner or calculator that will help you allocate money to specific things and stick to your budget.

7. Show them it’s all worth it!

There’s no denying that university is a big time and financial commitment, so showing your passion and enthusiasm about attending university can show your parents it’s worth it.

Plus, university is an investment that will prepare you for the world of work and having a successful career. Graduates earn an average of £10,000 more per year, or £400,000 over a 40-year working life than someone without a degree (Graduate Labour Market Statistics 2021, Department for Education).

8. Don’t be afraid to talk

If you do find yourself in financial difficulty, let your parents or guardians know straight away. If you bottle it up, you put yourself at risk of getting into debt and becoming anxious about your finances. It may be hard to have these conversations, but then you can tackle the problem together.

* MoneySavingExpert

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