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Saturday Money: How to survive the first year at university: Student finance Continuing our weekly series on coping at college, James Charles looks at ways to make your cash go further

August 23, 2014

James Charles

Skipping meals, being injected with malaria for clinical trials, working long hours in Tesco - just some of the ways first-year students at university manage to survive financially - while others just drop out.

As hundreds of thousands of young people, A-level results in hand, start heading off to university we asked students who did the same thing last year what life was like financially.

A YouGov poll for Lloyds Bank has just highlighted the tough economic realities, especially for those without generous support from their parents. It found that around one in six (17%) undergraduates didn't have enough money to cover their monthly outgoings, such as rent and groceries. The same proportion had considered ditching their degrees to take a full-time job.

HSBC, which examined the 20 cities with the largest student populations, found that London was by far the most expensive place. First-year students at University College London spend an average pounds 315 a week on rent, bills, groceries, alcohol and a bus pass. At the University of Leicester, the cheapest place in the country, it was almost pounds 120 a week less.

So how do hard-pressed students keep on top of their finances? This is what we found . . .

Dropping out:

Ollie Burman, Brighton

"I wasn't convinced my degree was worth pounds 9,000 a year, so I left," says Ollie Burman, who dropped out at the end of his first term.

The 19-year-old, from Leybourne in Kent, began his physical geography and geology course at the University of Brighton last year. He picked the degree because he enjoyed studying geography at A-level and thought he might work for an oil and gas exploration company when he graduated.

But two months into his course, on a field trip to Wales, he decided to drop out. "I loved the lifestyle, the socialising and meeting new people, but I knew from my very first lecture that I wasn't keen on my course.

"Then it suddenly clicked. I realised I didn't want to do it any more. Mum told me to stay in Wales and finish the field trip, go back to university and talk it through.

"But I wasn't having any of it. I'd made up my mind."

He jumped on a train home and never went back. "If I'm not happy doing something, I won't do it. And I was very aware of the money. Is it really worth all that debt, and no guarantee of work?"

Figures from the Higher Education Funding Council for England from the 2011-12 academic year - the latest available - show that around one in 13 male students and around one in 17 females dropped out in their first year.

Ollie quickly got a job as a junior broker for an investment firm, but was spending more than pounds 450 a month commuting to the City and his pay was based on commission. He left after a few months.

He is looking forward to starting a new job in September as a claims support adviser for a specialist insurance company in Kings Hill, just down the road from Leybourne.

Next year he can start studying for a qualification from the Chartered Insurance Institute. Eventually, he could become an underwriter.

"I used to think that a degree was essential. And it might be in some professions, but in other industries it's about experience and who you know."

Working in Tesco:

Matt Cornish, Brighton

It's the second most expensive place to in Britain to study, according to the HSBC survey. And that has been a challenge for 18-year-old Matt, who is entering his second year at the University of Brighton studying business management.

He says he has had to be "very cautious" - to the point of skipping meals.

Matt, from Beaconsfield, Buckinghamshire, doesn't get any financial help from his parents, or bursaries from his university. He survives on his maintenance loan, worth around pounds 3,600 each term, along with the money he earns working at Tesco.

Around half of students have a full- or part-time job, according to the Lloyds survey. Matt earns about pounds 7.50 an hour and works 13 hours over the weekend. He also gets a 10% staff discount on shopping at the supermarket, but still has to watch the pennies.

In his first few months as a fresher he budgeted just pounds 15 a week to spend on food. "I only bought things on special offer. For about a month or two I was only having one meal a day. I would wake up at around lunchtime but I wouldn't eat until four or five 0'clock. That would see me through until the next day".

He loosened the purse strings toward the end of the year, increasing his food budget to pounds 25 a week.

His biggest cost is accommodation. Last year he paid pounds 470 a month for his room in a house-share with seven other students, although it will be slightly less this year after the group found a cheaper place.

"The maintenance loan doesn't even cover my rent. There is a massive problem with the lack of affordable accommodation."

Matt is the first person in his family to go to university. His mum is a hairdresser and his dad a car salesman. He says life as a student is different if you don't have financial support from your parents. You can't go out as much because you don't have mum and dad to fall back on and ask for money."

Unlike almost every other cash-strapped student, Matt has resisted the temptation to open a student bank account with a huge interest-free overdraft, using a standard Halifax current account instead.

"Most students see overdrafts as their money, rather than debt they will owe to the bank. A pounds 500 overdraft means pounds 500 to spend as they like. I don't see it like that but, if worst comes to the worst, I would open one."

Taking part in clinical trials:

Lucy Warnock, Oxford

Lucy is studying French and has taken part in clinical trials and sold clothes on eBay to support herself at university.

The 20-year-old, from Doncaster, South Yorkshire, has found Oxford expensive. She receives a non-means tested maintenance grant of pounds 3,575, but that did not cover pounds 1,260 rent each term in halls at Magdalen College. She also receives pounds 400 a month from her parents - "most people do at Oxford", she suspects - but that doesn't cover all her living costs.

"Some wealthier students from private school clearly don't have the same financial concerns, but most people are in the same boat. We're all trying to save money."

Part-time work is frowned upon by the university, says Lucy, as it detracts from time spent studying. Instead, she has been taking part in psychological and clinical trials. "There are so many labs in Oxford, so you can sign up to emails sent out by Masters and PhD students needing volunteers. A friend is working on a project involving mild brain stimulation. I had to do a memory exercise and earned pounds 30. My boyfriend was given a minor strain of malaria. He earned about pounds 1,200."

This summer she also turned to eBay to secure extra cash to fund a year abroad, working as an intern at an advertising and branding agency in Paris. "I've raised pounds 250 so far. It's mostly been clothes. I sold my prom dress from Coast for pounds 20. And a Royal Doulton teapot for pounds 15."

Lucy is careful about budgeting. "I'm not from a wealthy family and I've been brought up to look for ways to save." She uses an app called Visual Budget to check income and expenditure, but regularly checks her balance using HSBC's mobile banking app.

"I also get text alerts if there has been a change in my balance."

Switching cities:

Charlotte Norman, Liverpool

Charlotte Norman has been studying to become a vet in London, but next month she will be moving to Liverpool to finish her degree - saving more than pounds 2,000 a year on rent.

The 20-year-old, from Milnthorpe, Cumbria, started the six-year Veterinary Gateway programme with the Royal Veterinary College last year. It includes an initial year then a five-year degree in veterinary medicine.

Charlotte was staying in student accommodation in Kentish Town, north London, paying pounds 7,589 rent, or pounds 151 over 51 weeks. "The RVC subsidises the rent to this price which is why it's actually cheaper compared with other London student accommodation," she says.

Faced with the prospect of a similar bill this year, she decided to apply through Ucas to complete the course at the University of Liverpool where a year at student halls will cost pounds 130 a week, or pounds 5,077 for 39 weeks.

It wasn't just rent that took her by surprise in London. "Going out is much more expensive. In Cumbria it's a pound here, a pound there. I ordered a double-vodka and coke in Leicester Square during Fresher's Week and was charged pounds 10.50. It would be pounds 3 in Cumbria."

She received a maintenance loan of pounds 6,858 and a non-repayable grant of pounds 2,058. "I had to pay 40% of my rent for the year in September, but at that time I had only received the lowest of my three loan instalments. I had to borrow from my family to cover it and that set me on the backfoot for the rest of the year."

Her maintenance loan will fall to pounds 3,862 in Liverpool, but the grant will rise to pounds 3,387.

Charlotte is already pounds 1,100 in the red. "I made a budget before starting but the timing of my student loan instalments and rental payments made it hard to plan. Next year I'm going to set myself a weekly budget."

Fortunately, she got a bursary for pounds 10,000 through her bank, HSBC, which she won as part of a competition for student current account holders. "Without the additional help, I wouldn't have been able to live," she says. The bank stopped offering the prize last year.

For more stories on investments and markets, please see HispanicBusiness' Finance Channel

Source: Guardian (UK)

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