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Plan early to avoid Student Debt

By - Tue, 21st Aug 2001

Ease the headache of debt by planning your finances

By BBC News Online's personal finance reporter Sarah Toyne
Juggling studying with money worries is now a fact of life for most university students.

Students now leave college with an average debt of at least 10,000.

But debt is not just a financial burden, it can be very stressful.

Here are some tips to help you start on the right footing.
More students are resorting to part-time work since the abolition of student grants and the introduction of tuition fees.

Choose a job which will be flexible and fit around lecture and tutorial times.

Some jobs will also allow you to work full-time during the holidays.

Your university's careers office and notice boards around your college are a useful place to start, along with classified adverts in newspapers.

The Recruitment and Employment Confederation's website has a list of employment consultancies.

There are also a number of websites aimed at students. Activate is one run in conjunction with the National Union of Students.
Part-time work

Your work rights

The minimum wage must be paid to anyone who is 18. It is currently 3.70 if you are 22 or older, or 3.20 for those between 18 and 22.

From 1 October 2001, it rises to 3.50 if you are between 18 and 22 and 4.10 for those who are older.

It is your legal right to be paid the minimum wage and you cannot be sacked or victimised if you complain.

Contact the national minimum-wage hotline on 0845 6000678 if you are having problems.

Part-time workers have the same rights as full-time workers, including holidays and sick pay.

The Department of Trade and Industry and TUC have further details on their websites.

Learn practical skills
Learning practical skills, such as computing, typing and brushing up on a foreign language while you are at college will help you get a better job.

You should make the most of any practical skills courses which are offered by your college or take a part-time evening or weekend course at a local adult education college, where you should qualify for a concessionary rate.

Avoid a financial hangover
You can find out about courses in your area by contacting the local council. Alternatively, there are a number of websites which provide course listings (see links on right).

The government is keen to promote "lifelong learning" and offers free or subsidised education for some courses.

Individual Learning Accounts are open to anyone over 19 years old.

You can get 20% off any course up to 100 a year, and an additional 80% off (up to 200 a year) on some courses, such as computer skills.

The Individual Learning Account Centre can be contacted on 0800 072 5678.

There are also Community Learning Centres, which offer highly subsidised and often free computer tuition and language training.

Some temping agencies also offer subsidised training.

Take care with credit

You should take out a student loan before you borrow through a bank, because it is one of the cheapest ways of borrowing money.

If you do need to borrow extra money, shop around for the best deals.

You may also be tempted to subscribe to a bank because it is offering free cash or offers, but more importantly you should look at the rates it is charging.

In particular, you should make sure you choose an account with cheap overdraft facilities.

You should also enquire about the bank's graduate banking facilities. This will give you an idea about how sympathetic your bank will be when you finish your course and need time to pay back any debts.

Banks can sometimes be over-generous. Remember that you will have to pay it back.

Don't pay unnecessary tax

Students who work during holidays and do not expect to earn more than their tax-free personal allowance (4,535 for 2001/2002) should ask their employer to complete form P38(S) which means their wages will be paid gross.

Big debts may disrupt your sleep

But students who work during term time as well as holidays can not have their tax paid gross.

If you have already worked, you should have form P45. Give this to your new employer.

Otherwise, your new employer will give you a form P46 to complete.

If you need further information, leaflet IR60 on the Inland Revenue's website has more information on income tax and students.

Get funding help

Most universities run hardship funds for the poorest students.

You may also be able to get help with living costs through a scholarship.

Scholarship Search lists funding opportunities from academic institutions, charities and companies (see links on right).

Even if you have missed the deadline this year, you can start looking for 2002/2003.

Further information and help

Most university welfare offices now offer debt advice services.

There are also a number of other organisations where you can get free advice:

National Debtline (0808 8084000), the Consumer Credit Counselling Service (0800 1381111), the National Association of Citizens Advice Bureaux (020 7833 2181).

The National Union of Students has useful fact sheets on its website to help you with financial planning.

Or try the BBC Essentials service: 0808 100 8000.

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