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Is your child thinking about university?

By going into higher education, your child will be making a long-term investment in their future.

Not only could they have a greater choice of careers, they may earn more too - over their working life, the average graduate will earn about £100,000 more, after tax, in today’s money than someone with A-levels who’s not been to university.

For many parents, however, the question of how their son or daughter is going to pay for their three or four years of study may be one of their first concerns.

Tuition fees and living costs: getting them covered

The two main costs that your child will need to cover while they’re in higher education will be their tuition fees and living costs. 

However, there’s plenty of financial support available for both, including non-repayable Maintenance Grants to help with living costs, which will be available to more students from 2008.

What money is available?

Generally, there are three sources of financial support available to new full-time students - Student Loans, grants and bursaries.

Remember that grants and bursaries never have to be repaid, regardless of what your child receives.

Student Loans

Student Loans are the cheapest form of money your child can borrow long term.

The interest rate is linked to the rate of inflation - meaning that what your child repays is broadly the same, in real terms, as what they have borrowed.

There are two different types of Student Loan - one is designed to pay for tuition fees (maximum £3,145) and the other to help towards day-to-day living costs such as rent and travel. Loans for tuition fees are not income-assessed: loans for living costs are.

Your child won’t have to repay their Student Loan until they have left their course and are earning more than £15,000. So, someone earning the average graduate starting salary of £18,000 will repay £5.19 per week.

Also, students due to start paying back their Student Loans from April 2012 will also have the option of taking a repayment break of up to five years - useful if they are thinking of buying a home or starting their own family. 

Non-repayable Maintenance Grants

Around two-thirds of all students starting courses in autumn 2008 could get a non-repayable Maintenance Grant to help with their living costs while at college or uni.

Whether your child qualifies, and how much they get, depends on your household income.

Households with an income of up to £25,000 will get a full grant (£2,835 a year), while households with an income between £25,001 and £60,005 will get a partial grant.

Non-repayable bursaries

On top of Student Loans and non-repayable Maintenance Grants, universities and colleges will also offer bursaries to a wide range of students. This is additional money that you don’t have to pay back.

Students paying the maximum tuition fee and receiving the full Maintenance Grant are guaranteed to get at least £310, but they’ll often get much more than this - in 2007/2008, a typical bursary was around £1,000.

• Find a bursary (opens new window)

Finding out more about student finance

Helping your child prepare financially: parents' stories

You can read about parents’ experiences of helping their child apply for student finance in ‘Helping your child sort out money for university’. You’ll also find links to lots more information about student finance on Directgov.

• Helping your child sort out money for university: parents' stories

Talking money with Martin Lewis

Money-saving expert Martin Lewis explains the difference between sensible borrowing and bad debt in ‘Talking money’, a useful guide for parents of students.

It explains what you and your child need to know about the student support package, student bank accounts, credit cards and part-time jobs. You’ll also find financial tips on preparing for university and budgeting, so you can talk money with your child.

• Download Talking Money: a parent’s guide to student finance in England (PDF, 1095K)

Applying for student finance

Your son or daughter should make their application for financial support as soon as possible after they’ve applied for a course - they don’t need to wait until they have received an offer from a university or college.

The online application process is quick and easy.

• How to apply for Student Loans, grants and bursaries (education and learning section)

Supporting your child's application

If your child applies for types of financial help which are income assessed, you’ll often be asked to provide information about your own income for their application.

• Financially supporting a student (education and learning section)

Questions about what uni is like?

You may want to find out more about what higher education will be like for your child - especially if you didn’t go to university or college yourself. Follow the link below for answers to some common parents’ questions.

• University and higher education: your child's options