Your financial plan starts now: How to make most of your money when paying for college

Having a solid financial plan is a key part of going to colleges, as there can be significant costs involved, particularly for students living away from home for the first time.

Many families have been left scrambling, trying to come up with an extra €1,000 for the upcoming college year, following the late announcement that student contribution fees are returning to €3,000 per person this year.

For those who are in a tight squeeze financially, there are some do’s and don’ts to consider to hopefully find the funds without any long-term damage to the family’s finances.

Karen Doyle is a certified financial planner at OnePlanFinancial in Glanmire, Co Cork.

She encourages parents to start planning early by saving the children’s allowance, for example or considering long-term investment funds if that is possible.

However, for people who need cash in the short term, Ms Doyle warns against cashing in pension funds if at all possible, because it comes with considerable financial consequences.

“Families in need of cash now should avoid cashing in their pension early if that can be avoided. It comes with tax implications and negatively affects the pension owner’s income into their old age,” she explains.

“Other options may be releasing equity from a mortgage or taking out a short-term loan, which come with lower interest than a pension,” she explains.

Karen Doyle, certified financial planner, OnePlanFinancial, based in Glanmire, Co Cork.

Ms Doyle has found that putting the younger children in a family through college is where families really feel the financial pressure.

“For many families, the cost of putting even one child through college is significant, but when there are two or more children, especially if their college years overlap, it can put enormous strain on household finances.

“By the time the youngest is ready to start third-level education, the family’s financial reserves may already be stretched thin. This is particularly challenging in households where there’s only one income, which is still common where one parent has stepped out of the workforce to raise the children.

“Add to that the rising cost of living, rent, transport, and food; especially if the student has to live away from home; and it’s no surprise that parents often find themselves scrambling to plug the gap,” she explains.

“In my experience, families tend to focus on the immediate needs of the eldest child first, and only later realise that similar or greater costs are coming down the track for younger siblings. This is where forward planning really helps; having a long-term view and putting a structure in place early can ease the pressure considerably when that time comes. But in the absence of that, it’s very common for parents to feel that by the time the youngest is ready for college, the tank is running close to empty,” she adds.

In practice, Ms Doyle finds mixed awareness of financial supports available in relation to third-level education, and says more public information is needed to raise awareness.

“Some families are well informed and make a point of researching the supports that are available to them, such as the SUSI grant scheme or the tax relief on college tuition fees. Others may only become aware of these options when they’re already deep into the process or sometimes, not at all.

“In some cases, people assume they won’t qualify and don’t apply, even though the thresholds can be more accessible than expected, especially for families with more than one child in college. Others might know there’s tax relief available for fees but don’t realise it applies to certain approved postgraduate courses or part-time study as well.

“It’s like anything; some people are naturally proactive and like to dig into the details, while others are juggling so much that these things can easily be missed. More public information or reminders at key stages like CAO application time could definitely help close that gap.”

Grants

This year the income thresholds to qualify for a SUSI grant have risen, and applications can be made online up to the 31st October 2025 for this academic year 2025/26.

SUSI offers Fee Grants where student fees are covered either in part or in full. SUSI also offers a separate maintenance grant to help with living costs.  (www.susi.ie)

For jobseekers and others receiving qualifying payments, there’s a Back to Education Allowance for those taking up full-time courses. (www.gov.ie)

Log on to www.hea.ie for information on other bursaries and funds available to third-level students.

For students already in college, most institutions have a hardship fund to help those in need of financial support.

Tax relief

Tax relief of up to €7,000 per person, per course, per academic year can be claimed on qualifying third-level fees, including the Student Contribution, as long as it is an approved course at an approved college.

However, tax relief cannot be claimed on admin fees, and costs like the USI levy or sports centre charge.

Only the person who paid the bill can claim the tax relief which doesn’t apply to the first €3,000 for full-time students, and the first €1,500 for part-time students.

A rent tax credit of 20% is also available, up to a maximum of €1,000 per person per year. See www.revenue.ie for details.

Take the long road to save money

Guidance Counsellor and former teacher, Claire Murphy of Galway Guidance (www.galwayguidance.ie ) says that money and accommodation are huge issues for students this year.

Students are afraid to defer college places for a year, she says, because they see prices going up each year, so attending will be even more expensive next year.

One way around this problem, Ms Murphy proposes, is to explore tertiary degrees where up to two years can be attended locally in a PLC, after which the students transfer to the HEI in order to complete  the final two years of the course.

“You can stay local for at least part of the training,” she says, adding that it’s really hard for families not living in or close to a university town.

An advantage of the tertiary degree is that students have access to the library and other facilities of the HEI for the entire length of the course, and these degrees come with a guarantee to progress to Level 8 as long as the required standards are met. (See www.nto.hea.ie)   

Some people find better value studying outside of the State, moving to Northern Ireland, for example, where healthcare courses are free and finding accommodation is less of a burden.

“There has been a huge increase in Irish students applying to UK universities because it is a lot easier to secure suitable accommodation and Uk universities also offer student loans for fees and maintenance, which means students don’t have to worry about finance until they graduate,” explains Claire Murphy, adding that Irish students in the UK may qualify for a student grant via SUSI, and advises students to fill in the indicator to see if they are eligible and then apply straight away. (See www.susi.ie).