University can be one of the most expensive time periods of a young person’s life, especially given the fact that when they attend university they are not yet established with any source of respectable income in most cases. With this thought in mind, students are faced with two large tasks before heading for Uni, deciding where to store their funds and obtaining those necessary funds to pay for university.
When it comes to choosing a banking account, students have many options with plenty of banking institutions offering free perks and benefits exclusively to students in an effort to draw their business. Some of the more major banking institutions that offer student accounts are Barclays, the RBS, and Halifax.
Students should keep both practical and financial considerations in mind when it comes to choosing which banking institution is the best for them. Financially they will want to consider if they want a credit card, switch card, checking account, or all three. They also will want to look closely at overdraft allowances and the attached interest rates since it is very likely that a student will use their overdraft at some point.
In terms of practicality, since most students live partially in their home city and their university city, a banking institution with branches that serve both communities is ideal. If this is not possible students should consider student accounts that allow cash point access at other terminals without banking charges attached, since this can result in the loss of a substantial amount of money each year.
After choosing a student banking account the next consideration is how to fund a college education. In the UK the government offers student loans to pay for tuition and in some cases living costs through the SLC (Student Loans Company). These loans are designed with interest rates that match or are lower than the current inflation rate which makes them the best choice for tuition funding especially due to the current credit crunch.
The amount that a student can take out in student loans is usually based on the residual income of their parents, out of which a calculated ability to pay taken into account. However, if a student is over the age of 25, has a child, or has supported themselves the three years prior to applying for aid then the student loan borrowing limits will be set according to only their income.
There are two types of student loans, tuition loans, which are paid directly to the university and cover all tuition costs, which all students are applicable for, and maintenance loans, which are paid to students to help supplement or cover living costs while at university.
In order to be eligible for tuition loans students can be part time students, but to be eligible for maintenance loans a student must be enrolled full time. All students are eligible for 75% of maintenance loans but the remaining bit called the income assessed bit is based on residual income as in the case of tuition loans.