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Student Bank Accounts

As you have probably found, getting to grips with funding university life can be a tricky and not to mention an expensive task. According to the National Union of Students, many of today’s students will have to find nearly £10,500 per academic year, and that is top of hefty top-up fees, which were introduced in 2006. As a result, NUS estimates that this year’s students face graduating with a total debt of over £20,000.

Another survey by NatWest found that top-up fees has driven up the cost of a degree to £34,740, so many of today’s students could be paying off their debts for 11 years or more!

Top-up fees and student loans

• If you live in England and Wales, all students have to pay tuition fees, with the maximum figure standing at £3,070 a year. Most universities will charge this fee, and there is no help from the Government, although students don’t have to pay the fees up front.
• The student loan increases each year, from £6,315 to £3,495 depending on your circumstances. Around 25% is means-tested on family income, so students whose family income is in excess of £38,805 will not receive the full loan.
• If you live in Scotland the rules are slightly different. Scottish students studying in Scotland pay no fees, and get a student loan of £870 to £4,400 if living away from home, and £575 to £3,485 if living at home.
• English or Welsh students studying in Scotland still have to pay fees, although these are considerably lower at £1,735.
• A £2,510 means-tested bursary is available if your family income is under £18,360, sliding to zero if it is above £32,515.

Top tips for academic year 2007/8

The good news is that banks can help ease the transition into university life, providing a whole range of student bank accounts for this year.

1. As a general rule when choosing a student account, don’t be tempted by freebies. For most students, the interest-free overdraft facility will be a real lifeline, so it’s important that you put your finances first and not your gadget collection. Whilst Barclay’s free cinema tickets or HSBC’s discounted CDs may sound tempting, NatWest’s offer of a free five-year railcard could save you a fortune in the long run.
2. For the all-important interest-free overdraft, Halifax currently offers by far the highest, with up to £2,750 available over the full three years. Barclays and HSBC both offer £1,000 in the first year, rising to £1,500 in year three, whilst NatWest offers £1,250 in year one, rising to £1,600 in year three.
3. Most of these accounts can also come with a student credit card, with a typical limit of around £500. But however tempting a credit card can be, you should take it with caution. The interest rates tend to be higher than average, so whilst the maximum limit may be small, even a few hundred pounds could be a struggle to pay if you don’t have a regular income.
4. Another important consideration when choosing a student account should be the locality of a local branch to your university or new home. Specialist student financial advice can be invaluable, and with a branch close at hand it’s that much easier to manage, maintain and speak with your bank.
5. Also make sure you keep a regular eye on your finances, as it’s too easy to lose track of your spending. The easiest way is to set up online banking, but take care to ensure that if using a shared computer your connection is secure, and that you sign off fully when finished.

Choosing the right student bank account really can save a small fortune over the duration of your course. Get it right financially and you’ll be top of the class come graduation day.

What to do next…

Check out Student bank accounts Best Buys…