The student finance guide

After the initial excitement of getting your A-level results and gaining entry to university or college, you'll need to start thinking about your money.

Government grants have now been abolished for new undergraduates, although existing students who are already receiving a grant will carry on getting the money until they graduate.

Your first priority will be to pay your tuition fees. Universities will usually stop people graduating if fees are unpaid. However, the maximum tuition fee contribution expected from students in 2000/2001 is ?1,050, and around a third of all students - those whose family income is below ?17,805 - will not be required to pay tuition fees.

There are also courses, or certain years of some courses, where your college will charge fees of ?520 instead of ?1,050. And if you are a student on a full-time or part-time course of initial teacher training (other than a first degree course), you should receive free tuition whatever your and your family's income.

In any case, however, most students are entitled to a grant towards their fees. This grant is based on an assessment by your local education authority (LEA) of your income and that of your family.

Your LEA will want details of your parents' residual income. It does this by taking their gross income, for income tax purposes, and subtracting certain allowances. Then the LEA decides the parental contribution according to the following calculation:
• no contribution if their income is less than ?17,805;
• ?45 if their residual income is at least ?17,805, plus ?1 for every ?13 of residual income between ?17,806 and ?22,754; plus ?1 for every ?9.20 between ?22,755 and ?33,449; plus ?1 for every ?7.50 for ?33,450 and over. The maximum contribution is ?6,437.

However, the actual parental contribution cannot be more than the maximum fee contribution of ?1,050. Different rules also apply if you have a brother or sister who is also receiving student support from the LEA. Your parents' total contribution will be worked out before it is shared between yourself and your brother and sister. In normal circumstances, it will be shared out equally.

But for all your other expenditure - rent, books, food, going out - you'll need to consider alternative sources of finance.

A student loan

The maximum amount of loan that you can get depends on where you live and study; which course you study; which year of your course you are on; how much you and your family are expected to contribute; and the length of your academic year.

Three-quarters of the maximum loan available does not depend on your or your family's income. For the 2000/2001 academic year, all students should qualify for a loan of ?2,795 (?3,445 in London) per annum. Some, from less well-off backgrounds, will be eligible for the maximum loan of ?3,725 (?4,590 in London). If you're intending to live at home with your parents, you will be eligible for a loan of ?2,215 to ?2,950 depending on income.

You don't have to borrow to take the full entitlement, but most students so as you cannot apply for a top-up later. The loan can be paid either in three equal instalments or in one lump sum. The latter course is suitable for students with will-power as they can earn interest on the sum advanced until it is needed. Those who cannot resist the urge to spend, are best advised to receive an equal portion of their entitlement each term.

Your parents

Tell your parents to dig deep. Calculations from the National Union of Students (NUS) suggest that students will typically face a shortfall of more than ?3,000 in each undergraduate year.

Some parents are better prepared than others. The most prudent will have been setting money aside for five years and more in a Tessa, Pep, Isa or endowment policy. Parents with less than a few months to prepare will have little option but to divert money from funds saved for retirement or to borrow.

Revolving credit or 'draw-down' loans secured on a home are a cheaper and more flexible form of borrowing than personal loans or overdrafts, allowing parents to draw down cash each term. Parents should also remember that most banks offer preferential rates to students - some parents may have reservations about letting their children loose with an interest-free overdraft, but it makes sound financial sense to take advantage of cheap credit where available

A job

Students are increasingly likely to take part-time jobs, though universities - and the NUS - tend to advise against it. The job market depends on the area, of course, but several sources of student earnings are not taken into consideration by your LEA when calculating grants. Wages from casual or part-time vacation and term- time jobs, the first ?820 of unearned income, ?1,000 of any scholarship and ?1,855 of any trust income are all ignored. Sums above these figures reduce the student's support ?1 for ?1.

Hardship money

Access funds and hardship loans are available to help students who are in financial difficulty. They can be used to help with living expenses and course costs including childcare costs, travel, accommodation costs, household expenses, books and course equipment. You will usually need to wait until you have started your course before you can apply for either a hardship loan or an access funds payment. However, if you think you may need additional financial help to complete your course, you should talk to your college before you start the course, about how these two schemes might be able to help you.

Colleges decide which students will receive payments and how much each payment will be. Student support or student services staff at your college will be able to advise you which scheme will best suit your needs.They will tell you how to apply. In some cases you may be able to have an access fund payment and a hardship loan at the same time.

Educational charities

There are many charitable trusts and organisations which can assist students. Many of the payments may be small, to help assist with the purchase of books and equipment, others can be quite substantial. Schools or libraries should have details of local educational trusts and charities. The Educational Grants Advisory Service, part of the Family Welfare Association, also has a comprehensive database of charities and trusts.

• Details of the scales, allowances and additional payments can be found in the Department for Education and Employment's booklet Financial Support for Higher Education Students in 2000/2001. To obtain a copy telephone 0800 731 9133.

Money Unlimited's student finance guide