The cost of university — and is it worth it?
Going to university is not a cheap option
Even if the study now pay later system keeps applications at record levels
The typical maintenance loan is £340 a month less than student living costs, according to a Save the Student survey
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We look at where the bills are incurred and offers tips on how to keep them down
Just over three quarters of students struggle to make ends meet, according to a recent survey by the Save the Student money site.
Its poll of more than 2,000 students this summer found that during the pandemic, more than ever were finding things tight. The typical maintenance loan is £340 a month less than student living costs, two in five have considered dropping out due to money worries and half worry about repaying their student loan in future.
Students have always had to manage on tight budgets, but increasing numbers are questioning whether an expensive qualification from a middling institution will add up to a higher salary later in life. Those who have already taken the plunge are being ever more innovative about saving money — or finding a “side hustle” to raise more.
Bills, grants and loans
UK students at English universities can be charged up to £9,250 a year, adding up to £27,750 in tuition fees for a typical three-year course. There are different rules (and lower fees) in Northern Ireland, Wales and Scotland for “home” students, and higher charges everywhere for foreign students, but the norm in England is to take out a loan to cover fees plus up to £12,000 in maintenance loans. The average end debt in 2020 was £45,000.
The Universities and Colleges Admissions Service (Ucas) has a budget calculator to help work out how much you’ll need for your chosen university, and maintenance loans depend on household income. For those with a household income of up to £25,000 a year, there’s a maintenance loan available of up to £9,488 in England (£12,382 for students in London). Students from households with higher incomes can borrow less. Where household income is above £62,286, students living away from home outside London qualify for a maximum maintenance loan of £4,422 a year. If household income exceeds £70,004, the most you can hope for, if living away from home in London, is £6,166.
There are extra grants — which don’t have to be repaid — for medicine and dentistry students on clinical placements and for studying abroad. There are also bursaries, grants and scholarships available at universities, although less than one-third of freshers applied for one in 2019-2020, according to Ucas.
Repayment of loans
Once you earn more than £27,288 a year, in England and Wales, you will have to start repaying your loan. All earnings above this level are effectively subject to an extra 9 per cent on top of income tax. Full details are available on the government website.
High and variable interest rates on maintenance loans have attracted criticism, with those on higher salaries being charged more. Interest accrues at a rate of 4.2 per cent: the Retail Price Index (RPI) plus up to 3 per cent for students living in England and Wales. This rate applies until April 5 in the year after you leave university. After that, the interest rate depends on your salary. Up to an income of £27,295, it stands at the current RPI (1.5 per cent). Above that income level, interest levied rises to RPI plus a sliding scale up to 3 per cent until salary hits £49,130, when it goes to RPI plus 3 per cent.
It is not cheap borrowing, but under current rules the loan is wiped out 30 years after graduation, so most students will not repay the full sum borrowed plus interest before the cut-off for repayment. And if you never earn more than £27,288, you won’t repay a penny.
Going out and takeaways amount to £88 of a student’s average monthly spend, according to Save the Student
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Where else does the money for living costs come from?
If you are on the minimum student maintenance loan due to high parental income, you are likely to become heavily dependent on the Bank of Mum and Dad, with shortfalls of £6,000 or more per year coming from this source.
Even if you receive the full whack in maintenance loans, there is likely to be a gap between your loan income and your living expenses. Save the Student’s survey suggests that 69 per cent of students saved money to go to university and two-thirds have a part-time job.
But the National Union of Students (NUS) is more concerned than ever that students are strapped for cash. “Students shouldn’t have to worry about working to cover basic necessities and should be able to focus on enjoying and thriving in their studies,” says Sara Khan, NUS vice-president for liberation and equality. “Education is a right that students should access freely from cradle to grave.”
How about earning and learning?
For some people, the cost of university just doesn’t add up. Conor Cotton, 22, from Cheshunt in Hertfordshire, had several offers for university degrees in the football and sports industry four years ago, but instead found a job via school leavers’ site called Not Going to Uni.
“I had several conditional offers but I didn’t want to pay that many thousand pounds so I ended up with a job as a sales rep, left to go and work in the City, and I’m now the managing director at Not Going to Uni,” he says. “I’m the living proof of not going to uni. A lot of people who had gone down similar routes to [the ones I was looking at] are unemployed. The story we were told was that you would spend all this money but were probably going to get a job, but that wasn’t transpiring with people I knew. I might have been the best student but have spent money for nothing.”
Conor Cotton, the managing director of Not Going to Uni
HOLLIE ADAMS / THE SUNDAY TIMES
He believes that school leavers should not be pressured into going to university if it isn’t right for them. “It’s OK not to know,” he adds. “There’s a hell of a lot of pressure, and some people panic. There are too many opportunities out there to think that university is the only viable route. You need to trust your instincts and remember what you do after school isn’t necessarily your for ever career.”
Universities are also introducing more degree apprenticeship courses, which mean that you can earn as you learn — perhaps the most practical option if you know what career you want to pursue. Cristina Campbell, 29, from Blackburn, is in her final year of a degree apprenticeship programme in nursing at Edge Hill University, specialising in learning disabilities. Without that opportunity, studying would not have been financially possible. “It’s amazing that I’ve been able to do it and it’s not going to set me back in regards to finances,” she says. “After buying our house then later getting married in 2014, there was no way I could have the student debt. I had never written an assignment before joining university, but I’m on track for a first with some of the results I’ve been getting, so I’m absolutely over the moon.”
Modern-day necessities
Money-saving websites such as Student Beans and Unidays are popular for bargain-seekers. According to Nomqhele Mhlandhla, a second-year business and management student at the University of York, the list of modern-day essentials includes media subscriptions such as Netflix. “Because of the pandemic, we have watched Netflix more often than ever,” she says. “In first year it was a good way of making friends. I joined university at a very queer time: clubs were shut, restaurants were shut; we could only mingle with people in our bubble. So the icebreakers were: ‘What do you watch on Netflix? What are your music tastes? We could do a Netflix party!’”
A gym membership is also essential to stay active. Nicole Haddon, a final-year student at the University of West London, says universities and some chains offer money-saving deals. “Gym-wise, chances are your university will have a deal,” she says. “Mine is ridiculously cheap for a nine-month contract and you get access to all classes. Outside of university, PureGym is reasonably priced for students.”
A bank account is a necessity, but some students recommend looking carefully at the offers from the big providers alongside internet-based banks. Nationwide’s FlexStudent account, with a £1,000 interest-free overdraft in each year of study and highly ranked customer service, is a good traditional bank, but there are more modern options. “A lot of the big banks advertise Asos vouchers or railcards: work out what they actually equate to,” says Haddon. “A railcard only costs £30. If that’s your biggest incentive to go for a bank, maybe you should look elsewhere, at interest rates and customer care. I think Monzo, an online bank, is great if you struggle with managing money: it splits up what you’re spending on travel, rent, bills and entertainment.”
Tips to save and earn
According to Save the Student, the largest chunk of a student’s average monthly spend (£421 of the typical £810) goes on rent. Groceries make up £101 and going out and takeaways amount to £88, while bills soak up £40. You can expect to spend £15 a month on your mobile phone, £17 on course materials and £34 on transport.
But some students believe planning makes the difference between eating into that (interest-free) overdraft and staying on track. “Meal prep is a tip: make dishes to put in the fridge because after a night out with friends you might crave it,” says Mhlandhla. “When you grocery shop, bulk-buy: it saves so much. Good discount companies are Student Beans and Uni Days, for going out and shopping, and I would not shy away from a cheeky deal from Morrisons.”
Haddon suggests finding out what time supermarkets reduce their food and then going “yellow label hunting”. “There are great apps like [the free sharing app] Olio and Too Good to Go,” she adds. “Last summer I was a food waste hero with my aunt. We’d go to Tesco and collect all of the yellow label food and give to the local community through the Olio app, all free. With Too Good to Go, you pay an extremely discounted rate. Use your common sense: avoid certain supermarkets and prioritise your Lidls, Aldis and Sainsbury’s.”
Meanwhile, the modern world also offers net-based earning opportunities. According to Save the Student, two in five have earned a little from a small business or side hustle and for Mhlandhla an Instagram fashion account and small content creation deals raise as much as a weekend job at a restaurant. “It was good for my mental health as well!” she says.
Is it worth it?
Many people have been reassessing the value-for-money equation for a university degree, particularly if there’s a chance that it will mean a lot of remote learning: unlike almost any product you buy nowadays, there are no refunds for a below-par university course.
But for people like Haddon, who has picked up part-time summer work at the London Speaker Bureau and takes every networking opportunity that the capital offers to prepare for a future career in theatre or film, there is more to university than the course itself. And it’s still worth it.
“There’s no point in coming to university if it’s not going to benefit your career . . . but university is definitely about more than getting a degree,” she says. “The way in which you learn about the social side, making friends and networking certainly gives the academic a good run for its money.”
Case studies
Cristina Campbell says that an apprenticeship is the perfect path for her to become a nurse
TIMES PHOTOGRAPHER JAMES GLOSSOP
The degree apprentice
Cristina Campbell 29, from Blackburn, is in her final year of a four-year BSc honours degree in nursing, (learning disabilities) via an apprenticeship at Edge Hill University.
“I did explore university but I wasn’t very confident when I left school,” she says. “I went into care work with people with learning disabilities and mental health issues, and I got a job at what is now called Merseycare Whalley. I just kept knocking on the matron’s door asking for opportunities to apply for my nursing [qualification].
“It has always been one of my life’s dreams . . . being a nurse, but being a more mature student I had a house, a mortgage, a husband and four-year-old daughter, so it was never really an option for me not to be in work, to go to university and have all the student fees and debts. But Merseycare and Edge Hill came up with this apprenticeship opportunity.”
Although she has a reduced wage, she can both study and pay her bills. “They came up with a really structured, supported timetable which meant I’m earning a wage, I don’t have any student debt but I get to go to university and on placements.
“It’s amazing that I’ve been able to do it and it’s not going to set me back in regards to finances. I feel so lucky and I’ve loved every minute.”
Nomqhele Mhlandhla helps pay for university by creating content on Instagram
ANDREW FOX / THE SUNDAY TIMES
The undergraduate with a side hustle
Nomqhele Mhlandhla, 19, a second-year business and management student at the University of York, budgets by bulk-buying, cooking ahead and earning a little bit of money through content creation, via her Instagram account, @nxmmiq.
“Getting out of university with debt is not something I look forward to,” she says. “You work so hard to make sure you get a good qualification, you put all your blood and sweat into a degree . . . It’s a feeling you try to run away from.
“My fees each year are £9,250, and that’s covered by a student loan. A year in industry is part of my course. I do still receive student finance when I’m on placement year, and I think the employer will pay money. I have parents who support me so I’m able to get by with good financial management and some guidance.”
Bulk-buying, making meals ahead of nights out and using an overdraft only in emergencies are among her tactics: “A maintenance loan can be £7,000 to £8,000 and your annual rent is £500 to £1,000 less. I live in university accommodation and living costs are £250 per month. One thing I’ve learnt is everything needs to be budgeted. If there’s a party, I budget that. You break down how much you’re getting each week.
“Before I started university, I was a content creator on Instagram, around fashion. I get contracts with companies and when I started, that’s what I did in my spare time. It allows me to spoil myself every now and then, if I want a cheeky takeaway or if me and my friends want to have a drink. It taught me to be financially disciplined.”
The undergraduate yellow-label hunter
Nicole Haddon, 20, lives in London after going to high school in Sri Lanka, and is in her third year at the University of West London, studying acting and theatre-making.
“The course is a standard price of £9,250, which is covered by student loans, and then you have your maintenance loan on top of that, which is catered to each student on family income,” she says.
“It’s scary to a certain extent. As soon as you step forwards you’ve got debt, however you only pay a student loan when you’re earning a significant amount. That sets my mind at ease.
“Living in London, I think rent was the most expensive factor: it costs £650 a month. We’re in north Ealing, in a four-bed house, we have bills of about £60 a month, food is about £50 a week, then entertainment. Transport is £20 to £30 a month for work, but I’m near campus. I’ve been working this summer but usually go out at weekends: now I’ve income coming in, I’m at ease with spending it. As a student, you have to balance what’s going in and going out.”
“In terms of food, don’t be afraid to go yellow label hunting, and there are great apps like Olio and Too Good to Go for free or extremely discounted food.
“There’s no point in coming to university if it’s not going to benefit your career. People do calculate this because of the sheer price of it, but university is definitely about more than getting a degree. The way in which you learn about the social side, making friends and networking certainly gives the academic side a good run for its money.”