Student Life- Finance and budgeting

What do you think the difference between a normal bank account and a student bank account is?

Student bank accounts These are different to normal bank accounts as they offer a much larger interest free overdraft. What is an overdraft? How much is a typical overdraft

Overdrafts Money that you can use when you go below £0. You have to pay this money back eventually but you don’t face any financial penalties for using it (unless you go over the limit).

When do I pay back my overdraft? Most student bank accounts will offer an extra 1-3 years of 0% overdraft.

1.When looking at overdrafts, look for the ‘guaranteed’ overdraft limit rather than the ‘up to’ limit. The banks that offer an overdraft ‘up to’ a certain amount will often offer you much less. 2. The banks can also ask for the full overdraft amount back at any point when your time is up with only months notice or you will be charged a percentage.

Dos and Don'ts when applying for a bank account Do Look for the account with the largest overdraft. Do sign up for online banking. Don’t Go with a bank that is the one you are currently with / your family use (unless it offers the best deal). Open more than one student bank account. Get drawn in to using student credit cards. The interest is massive!

What are the best current options? Bank name Overdraft facilityIn credit interest Added BenefitsCharges on unarranged O/Drafts Santander£1,500 (3 years) 1%Young Person railcard (£120) For 4 years £5 daily charge (£10 max month) Co-op BankY1: £1,400 Y3: £2,000 None 18.9% EAR £15 unpaid item HalifaxY1: £1,000 Y3: £3, %25% Breakdown cover 24.2% plus monthly fee of £28 HSBCY1: £500 Upto £3,000 2%18 free album downloads £25 per item charge NatWestTerm 1 - £500 Term 3 - £1,000 0%Free Tastecard (£80) £5 daily charge RBSYr1 - £500 Yr3 - £1,000 0%Free Tastecard (£80) 17.8% EAR Lloyds TSBYr1-3 £1,500 Yr4-6 £2, %Free NUS card£5 daily charge (£10 max month

The Facts Universities and colleges can charge tuition fees of up to £9,000 Tuition Fee Loans will go up to cover the higher fees Part-time students can apply for a Tuition Fee Loan (replacing grants) for the first time You don’t start repaying your loan until you earn £21,000 (up from £15,000) Universities and colleges can charge tuition fees of up to £9,000 Tuition Fee Loans will go up to cover the higher fees Part-time students can apply for a Tuition Fee Loan (replacing grants) for the first time You don’t start repaying your loan until you earn £21,000 (up from £15,000)

A Tuition Fee Loan to cover your tuition fees in full A Maintenance Loan for living costs like rent (full-time students only) A Maintenance Grant if your household income is less than £42,600 (full-time students only) Scholarships and bursaries from colleges and universities Extra financial help if you have a disability or children or adults depending on you What will I get?

Only full-time students can get Maintenance Loans and Maintenance Grants for their living costs. Maintenance Loans The maximum Maintenance Loan for new students starting from 1 September 2014 is: £5,555 if you live away from home and study at a university or college outside London £7,751 if you live away from home and study at a university or college in London £4,418 if you live at home Loans and Grants for living costs

You can also apply for a Maintenance Grant if your family income is below £42,620. You can get: £3387 if your household income is £25,000 or under £50-£3387 if your household income is between £25,000 and £42,620 These loans and grants are paid into your bank account at the start of each term, once you've registered on your course. Maintenance Grants

You may be able to get a bursary, scholarship or award directly from your university or college. The National Scholarship Programme helps students with a family income of £25,000 or less. Bursaries and scholarships do not have to be paid back. Scholarships, bursaries and awards

Tuition fee loan Maintenance loan Maintenance grant Money that covers the full amount of your tuition fees. This money goes directly to the university. You only have to start paying back the loan when you are earning over £21,000 a year This covers the cost of living and any materials you may need for your studies e.g. Books Paid into your bank account in 3 termly instalments (Oct/Jan/May) You only have to start paying back the loan when you are earning over £21,000 a year All students get at least 75%; the remaining 25% is income assessed This covers the cost of living and any materials you may need for your studies e.g. Books Available to all students whose household income is below £42,620 Paid into your bank account in 3 termly instalments You NEVER pay this money back! The Differences

Anyone receiving the FULL maintenance grant and who are on a course charging full fees will receive a bursary that matches the difference between the maintenance grant and the cost of the tuition fees. Many universities are offering more than the minimum amount. Bursaries

Online application at The latest you can apply for student finance The latest you can apply for student finance Up to nine months after the start of the academic year if you’re a full-time student Up to six months after the start of the academic year if you’re a part-time student How and when can I apply?

Your income per year Monthly repayments £21,000 and under no repayments £25,000 £30 £30,000 £67 £40,000 £142 £50,000 £217 £60,000 £292 How much will I repay?

Earning £25,000 for 30 years would mean that you pay back £360 a year which over 30 years is £10,800. Meaning you could write off a potential £32,700 For example:

Additional payments Students can pay back all or some of their loan at any time without incurring an early repayment charge. If you go abroad... for more than three months, you need to let the Student Loans Company know. You need to fill in an overseas income assessment form and give evidence of your income or means of support while you’re abroad. You’ll then be given a repayment schedule. After 30 years any remaining debt is wiped out. The 30 years start from the April after you graduate or leave your course. Student loans are not included when carrying out a credit check. This means that you student debt will not count against you when applying for credit cards, mortgages etc. Do you know?

What do you think a young person living independently spends their money on? In your groups write a list. Budgeting

Rent Electricity / gas bills Water bills TV Licence Phone contract Internet Supermarket shop Meals out Socialising Car Tax Takeaways Books Travel Alcohol Clothes Taxis Car insurance Music Petrol Public transport Cigarettes Give yourself a point for every one of the suggestions you got that are listed below

1.Fill in the worksheet with your estimate of how much each item on the list would cost. Task The winning team will get a prize. You only have 5 minutes to do this!

Answers Gas and electricity per month- £70 Rent per week - £100 per week Virus protection – £60 per year Colour TV licence per year - £142.50

Answers Bread (1x800g loaf)- 90p Beans (1x425g tin)– 45p Bananas (6pack) – 1.40 Pasta (1kg) - £1.40 Coffee (200g jar) - £2.19 Minced beef (500g) £2.99 Chicken (500g) - £5.00 Stir fry veg (350g) - £1.00 Potatoes (1kg) - £1.40 Toilet roll ( 4 pack) - £1.78 Washing up liquid - 89p Milk (2pints) - 89p Apples (bag of apples) -£1.90 Pure Orange Juice (1 litre) - £1.58 Tuna (4 pack) - £3.99

Student Life Organise yourselves into 6 groups of equal size

Use the sheet provided IncomingsOutgoingsRunning total In the incomings and outgoings write down the reasons WHY you gained or lost money.

Instructions You each have £1100 (a similar amount to what you would receive in your first maintenance loan allowance) CHANCE cards – squares with a ?, train stations and go to jail square COMMUNITY CHEST cards – squares with a chest and free parking and if you land DIRECTLY on GO JAIL – You must pick up a CHANCE card. You can leave on your second throw and pay a £50 fine

STOP!!! You need to pay for your accommodation Pay out £600

STOP!!! Your new student loan comes in. Add £300 If you land on a BROWN or ORANGE square you must now pick up a CHANCE card If you land on a PINK or NAVY square pick up a COMMUNITY CHEST card

Did anyone end up with a minus amount e.g. - £300? (this is why it is useful to have a student bank account with an overdraft) What were the biggest expenses you came across? Were you surprised by how much anything cost or by any of the things you had to pay for?