Business Personal Finance

Wednesday 17 October 2018

Financial survival at third level can be an education in itself

If you're set to start third-level education this autumn, now is the time to start working out how to pay for it amid rising costs

(Stock image)
(Stock image)

John Cradden

If you are looking to enter third- level education for the first time this year, your thoughts to date may well have been overwhelmingly focused on the choice of course or institution.

You can still change your mind, of course, but now is also a good time to start looking ahead to the money side of things.

For a start, you should know that applications opened last week for grants that could be worth as much as €12,000 to some students.

If you don't qualify, and your parents have not put much or any savings aside over the years for third-level costs, there are options in the form of student or educational loans.

There are also opportunities for financial assistance to more talented students in the form of various scholarships.

It's also worth making sure you are up to speed with the key pillars of good money management to match the greater independence - but also greater personal responsibility - that comes with a third-level education lifestyle, particularly if the plan is to live away from home.

Student grants

The deadline for student grant applications this year is July 12, but it's well worth sending in your forms as early as you can, as late applications can mean you might be well into the college year before you (or your child) gets the payment, assuming you qualify. If you are renewing a grant, the deadline is June 14.

Many who look into grants for the first time mistakenly assume that you need to have a college place secured before you can apply.

"They do not need to have their leaving certificate results, or to have accepted a course, in order to submit an application," said Aoife Greene, spokeswoman for Student Universal Support Ireland (Susi), which runs the grant scheme. Some 20,000 new applicants received offers prior to the CAO offers last year.

The grant for day-to-day living costs, known as the maintenance grant, is worth up to €3,025 for eligible undergraduate and PLC students - or up to €5,915 for students from families in most financial need. There is also a 'fee grant' worth as much as €6,270 towards the cost of tuition fees, essential field-trip expenses and the student contribution charge.

Some students qualify for both the fee grant and the maintenance grant.

Whether you qualify for a grant and how much you might qualify for will depend primarily on you or your family's income.

If you are considered to be dependent on your parents, you won't get a full grant if your family's income is over €39,875, but if you have more than three siblings, the income limits are a little higher.

You may still be entitled to a partial maintenance grant if your family's income is over these limits, while a partial fee grant may also be within reach, too. How much you get will also be influenced by how far away you live from college, with those living further than 45km away entitled to a higher rate than those who live closer.

Loans

If you or your child qualifies only for a partial grant (or no grant at all), and need to top it up with other funding, some banks do offer student and educational loans.

Bank of Ireland, for example, offers an interest-free 'preferred faculty' loan to students in the final three years of studying medicine, dentistry, veterinary, pharmacy, accountancy, science, law, computing and engineering.

Students can borrow up to €2,500 for each of the three years at no interest and there's no need to repay while in college (after you graduate the interest rises to 9.7pc APR). The bank also offers a 1pc interest multi-purpose loan for amounts up to €1,000 a year. AIB offers a 8.5pc loan specifically for paying the annual student contribution charge, for which you can repay only the interest on the loan for up to four years.

Credit unions offer by far the best rates on student loans, such as the 6.5pc loan offered by Tullamore Credit Union or the 7pc loan from First South Credit Union in Cork.

Scholarships

For students who show strong academic promise, there are a range of scholarships available that would represent a significant boost to your finances at college and, for some, could mean the difference between being able to pursue third level or not.

Many colleges - such as NUI Maynooth, UCD and UCC - offer an automatic entrance scholarship sum to students who received a substantially high number of points in the Leaving Certificate.

But there are some schemes available for those whose talents lie more in artistic or sporting fields than in their likely performance in the Leaving Cert.

According to the EU Funding Guide, which is supported by the European Commission, there are more than 12,000 scholarships, grants, loans and other funding options available in European third-level institutions (including Irish institutions), worth an estimated €27bn.

It also claims that more than two-thirds of students in Europe never even think to apply for any type of scholarship.

The catch, of course, is you may have to search long, hard and quickly, as many scholarships and bursaries are not widely promoted and deadlines for applications are already close. But the Higher Education Authority (HEA) recommends contacting your college of choice as your first port of call.

Financial education

Whatever your source of student finance, third-level education has always been about making meagre resources go further, but rising costs of going to college means the current crop of students certainly have their work cut out for them.

Financial literacy guru Frank Conway has been working with a number of institutions to develop and deliver a short course on financial education for college students.

"At third level, those attending should have been exposed to the key pillars of sound money management," he says. "If they haven't, they are likely to develop money habits that will be difficult to shake for the rest of their lives."

A core lesson, he says, is knowing how to protect your personal credit profile, as a poor credit record will restrict your credit, employment, insurance and property choices. "Having a good personal credit profile really does underpin a large part of modern living so it's critical to protect and nurture it," he said.

Conway's course also looks the critical differences between saving and investing, and how to tell good debt from bad debt.

Budgeting is a strong theme, too, Conway looks at the major annual expenses students face and how they can budget properly. "This is an important exercise for students who say they want to learn how to be financially independent and develop the skills to stay the course."

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