In the UK the average student debt for third level education is £44,000 (€51,163) while in the USA it is even greater, where the average student accepts that they will have to repay their student debt for the first 10 years of their working life.
Harvard, for example, costs over $150,000 for the privilege of their parchment. That loan is inbuilt with their mortgage or rent payments.
Here in Ireland, we are a far cry from that where the parents often take on the responsibility of paying this debt from day one.
I worked out that if you invested that €140 Child Benefit each month in a stock market managed fund from the first month your child was born, continued it for 17 years – it finishes at age 18 – funded the 18th year yourself and assumed a growth rate of 5% each year, you would finish up with around €42,000 – the exact amount required to fund a student’s entire third level education.
Now when I tell you that 95% of households use the Child Benefit for the precise reason of its introduction – to help families financially with their week to week living costs – you can understand why many families are under great financial strain when their children actually reach third level.
For those with limited income, you can apply for a grant – SUSI (Student Universal Support Ireland) is a complicated grant process and outside most families’ eligibility especially those in the middle income bracket. Click here to check the specifics and see if you qualify.
No qualifying third level student should be precluded from going to college because they or their parents cannot afford it.
When it comes to daily expenses as a student, one way to save on costs is to shop around and always look for value. The difference between two fast food chains or supermarkets might mean you have the fare to get home! Your student card can sometimes be a God-send.
As far as the financials are concerned, when it comes to student loans I would always check out your local credit union first – they generally have the best rates and are the most flexible. For student loan comparison, check out the Central Bank’s Competition and Consumer Protection Commission website.
Of the two pillar banks, AIB offer 8.45% (€3,000 over one year will cost €261.59 per month – interest for the year amounts to €139.08) while Bank of Ireland offer 5% (€256.82 per month and an annual interest of €81.87)
Credit cards are a minefield. Most students do not have the income to repay so therefore knowing the interest rate chargeable is important. Late payments will attract a charge of €7 – so don’t be late!
Should you "max out" your card, you will be required to repay over a 12 month period – so on a limit of €1,500 the monthly repayment including the €30 government stamp duty will be €127.50 per month – tough when you have to study too! Of course you could transfer the balance to An Post Money – they have the best deal on the market at 0% interest for 12 months.
When it comes to current accounts, again AIB Bank and Permanent TSB would have the edge though An Post Money are now starting to flex their muscles.
I would also certainly suggest a student budget exercise. You should know what your total expenses are in relation to the income/grant coming in before you start your first term. You have two choices if your expenses exceed that income: earn more or cut costs.
Finally students should remember the word "discount". There are so many areas to receive value simply by showing your student card. Check these websites for details of discounts:
- Savvyspender.ie
- Myunidays.com
- Studentbeans.com
And receive discounts on:
Food
- Captain America’s
- Domino’s Pizza
- McDonalds
- Milano’s
Clothing
- JD Sports – 20%
- River island – 15%
- Nike – 10%
Travel
- Irish Rail – lower prices for students
- Student Leap card
Technology
Dell – the best at 20%
Papers
Irish Times offer free digital access to students
Streaming
Spotify – €5.99 per annum
That’s just the tip of the iceberg, check them all out. Enjoy your studies but have fun.
For more information click on John Lowe's profile above or on his website.
The views expressed here are those of the author and do not represent or reflect the views of RTÉ.
