NatWest’s 2022 Student Living Index found Manchester and Coventry are the most expensive cities for students to rent, but rank highly for income from part-time work.
In contrast, housing costs are relatively cheap in Edinburgh, but it is the only UK city where student costs such as transport and bills outweigh their income, according to NatWest’s research.
Cardiff tops the list for value for money, with below average rent and high levels of income for student jobs.
“Having a child away at university can cost more than having a child at home,” said Joshua Gerstler, chartered financial planner at The Orchard Practice.
“As well as tuition, you also need to consider the cost of their accommodation.
“They are no longer part of your weekly food shop and will need money for groceries, which even if it is just beans on toast everyday, the cost will soon add up.”
One money-saving option may be for them to live with you if they are studying locally. But you would have to factor in how that hits your own household bills.
These decisions become more fraught and expensive if you have more than one child.
“The ideal scenario would be to have them in the same city so that they can share living accommodation and reduce the costs,” Mr Gerstler added.
“However, I am not sure this would be a popular solution for most siblings.”
Parents with deeper pockets may decide to invest in a property in their child’s university location, benefiting from any property growth while their child lives there, and perhaps earning rental income from other students if it has multiple bedrooms.
However, given most undergraduate university degrees are three years long, and with house prices sliding, there is a risk of losing money if you were to plan to sell up when they graduate.
Now read: The ultimate student renting guide
Balancing family and state support
Financial support is available through student loans to cover tuition fees and maintenance loans for living costs, such as rent and course essentials, so parents could make up any shortfalls.
Plus, the finance may never have to be repaid if the student doesn’t ever earn above a certain threshold once they graduate – more than £25,000 for people starting their studies this September.
But the maintenance loan is linked to how much the child’s parents earn, so you could get caught out if you start earning more – plus critics say the figures still aren’t enough to cover bills even if a child takes on part-time work.
The maximum maintenance loan as of 2023/24 for a student living with parents is £8,400, rising to £9,978 if they are away from home and studying outside London. Those studying in the city can get up to £13,022.
The support is reduced by £1 for every £7.01 of your total household income over £25,000, until 46.6pc of the full maintenance loan remains.
For example, if your household income rises from £25,000 one year to £30,000 a year later, the amount your child receives from the maintenance loan if studying away from home in London would drop from £13,022 to £12,297.
Scott Gallagher, director at advisory firm Rowley Turton, warns the low £25,000 threshold for full maintenance grants results in reductions akin to a 14pc tax on income exceeding it.
“For less privileged students reliant on their loans, the lack of parental support may force them into part-time jobs, hindering their studies and creating another obstacle to social mobility,” he said.
“Parents able to do so may consider topping up maintenance funds to alleviate financial pressures and empower students to excel in their education.”
Now read: The graduate jobs that pay six-figure salaries
Teaching life lessons
This may be the first time your child has lived away from home and is in charge of their own finances.
The main risk with fully funding a student’s studies is that they don’t learn these vital money skills and lose a chance to gain financial independence.
“Even if you are fully funding your child through university, encouraging them to take on some part-time work is a great way to understand the value of money and appreciate what you are doing for them,” added Mr Gerstler.
Parenting blogger Emma Bradley, who runs the Emma and 3 blog, suggests there are other ways to foster independence, such as by encouraging your child to do chores at home or getting them to take responsibility for running a car or arranging a family holiday.
“Even if you are financially responsible, there is still plenty that university students and apprentices can take responsibility for,” she said.
Now read: The ‘Mickey Mouse’ degrees that could damage your career prospects
Source: Telegraph
