MAKING CENTS: Coping with the costs of college is a skill in itself

Leaving Certificate students get their results tomorrow and, for many, it marks the start of an exciting new chapter in their studies.

But third-level education comes with a hefty price tag; the cost of studying away from home in Ireland is currently estimated to be roughly €11,000 per annum. Families who have been in a position to save for this time may feel fully ready for the expense, but for many other young people and their parents, loans will be needed to cover the cost.

AIB and Bank of Ireland (BoI) both offer loans specifically tailored for students. AIB offers students a reduced rate of 8.5% APR on their Student Personal Loan, up to a maximum of €50,000. Borrowers are expected to make monthly capital and interest repayments and also have the option of making unscheduled, additional repayments at any time. As is true of nearly all student borrowings, a parental/guardian guarantee will normally be required.

AIB also have a loan product tailored specifically to fund the Student Contribution Charge — in other words the annual registration fees. Students can apply for a loan of up to €3,000 each year for up to four years, to cover the cost of the Student Contribution Charge and other fee-related expenses. An interest-only repayment option means the student need only make minimum monthly interest repayments for the duration of their course and then commence full repayments of the balance on completion. The interest rate is the same as their standard student loan, 8.5%.

BoI’s Standard Student Loan is similar to AIB, but has a higher rate — 9.7% APR — and a maximum loan amount of €10,000. However, for students who only need a small loan to fund living expenses such as travel or rent, they offer up to €1,000 at a very low 1%. Borrowers have 12 months to repay the loan in full and can defer the first three monthly repayments if they wish. Both AIB and Ulster Bank offer students interest-free overdrafts of up to €1,500 which would also cover temporary shortfalls but students might prefer the structure of set repayments rather than an overdraft that it can be all too easy to use and reuse.

In the past, both AIB and BoI had tailored loan options aimed at parents who wished to borrow for their children’s education but neither have a specific offering this year, meaning parents will have to borrow at their standard personal rates. Another option for parents who would rather keep education debt in their own names is to borrow from their Credit Union. Rates vary from branch to branch so parents should check with their own branch.

Students should always check their eligibility for state financial assistance, primarily the student grant. The preferred processing deadline for the SUSI grant system was July 8, with applications received by that date being looked after first. But a spokesperson confirmed they are still accepting applications so if any family feels they may be eligible there is still time to apply for funding for the upcoming year. SUSI has received 93,000 applications to date, but expect to process approximately 110,000 in total. If you are considering an application, double check the requirements at www.susi.ie and apply as soon as possible.

There are also other supports available, such as the Fund for Students with Disabilities, which allocates funding for the provision of services and supports to full-time students with disabilities. A claim under the Fund is made on behalf of an eligible student by their college rather than directly to the Fund by students. You can get more detail on this fund, including a step-by-step guide explaining how to check eligibility and apply, at www.studentfinance.ie. The same website also offers detailed information on other bursaries and scholarships available and also details of the Student Assistance Fund, which provides help for students in financial difficulty.

Next week, we’ll be looking at advice for students managing their day-to-day finances while living away from home for the first time.

DEAL OF THE WEEK

Bord Gáis Energy has upped the ante with its Back-To-School offer.

Apathy keeps most of us with our current energy providers but Bord Gáis promises major savings if customers make the switch.

It is offering new dual fuel customers a 12% electricity discount and a 10% gas discount, which works out at 13.66 cent (ex VAT) for a unit of electricity and 4.47 cent (ex VAT) for a unit of gas.

Customers must sign up for paperless billing, direct debit, and Level Pay to get these rates.

Level Pay means that your annual bills will be evenly spread out over the course of a year.

With longer nights and higher bills on the horizon, this is the perfect time to assess energy bills as a move now could pay dividends when the Christmas bills hit in January.

To sweeten the deal, Bord Gáis is throwing in a €75 Tesco voucher for customers who switch before September 4.


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