Money Box Live from Leeds: Student Finance

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Hello, it is a rainy, windy day and we're at the University of Leeds Freshers' Week as thousands of students arrive, meet each other and get to know their new home. And we have quite literally set out our stall in the middle of the Freshers' Week. Fair. Hiya, we're the debate union. If you love to argue, come see us. Hi. So we're the Women in Leadership Society. We'd love for you to join us. This is Quad Ball, originally inspired by...

the sport of Quidditch from... We're Leeds Entrepreneurs. We're here to help students start their own business. Hi, we're the Taylor Swift Society. I love that there's a Taylor Swift society. But this year's freshers have an extra challenge. Students from England face the prospect of paying back their student loans for an extra 10 years, potentially into their 60s, as part of some of the biggest changes.

to student finance for more than a decade. Here's the reaction from some of the students I've been chatting to. I don't think that's fair, especially when, like, everyone from low-income families deserve to have the same equal chances. Bit miffed. Yeah, I don't know.

So it's quite annoying, but at the same time, I know it's a long time investment for me for what I want to do in the future. We can't really do much about it because that's what the government is telling us to do. But I would prefer it if it was before, like how it was before.

Well, this afternoon, we're surrounded by stands advertising the many different societies you can join. In fact, we are wedged in between the horror movie sock and the coffee appreciation society. There's even a poster and houseplant sale. So pretty. much everything you need to start university life we're going to talk more to students about those changes to their loans before we do here's the financial expert and campaigner martin lewis with a handy explainer now these changes are both subtle

and massive. On the surface, they look like a tweak. In practice, they're going to increase the eventual cost of going to university by over 50% for many typical Now, I know nobody wants to hear that, but we've got to be practical about the finances. Why am I saying you're going to pay more this year? Let me take you through it step by step. Number one.

you're going to repay 9% of everything you earn over £25,000. Those who started the year before... repay 9% of everything they earn over £27,295, which effectively means for somebody over the threshold, you're repaying £207 a year more because you start repaying on lower income.

Next, someone who started last year, they would have repaid for 30 years. You're going to repay for 40 years unless you pay it off beforehand. And that has a massive impact on the total you repay. There is some good news. Last year's starters paid higher interest than you. They paid up to inflation plus 3%.

You're just going to pay the rate of inflation. So there is no longer a real cost, an above inflation cost to getting these loans. What is the impact of all these changes? All in all, when you leave university... you're going to pay more than if you'd started the year before. But I can't leave you on that thought. University can be brilliant for your career, brilliant for your earnings, brilliant for expanding your mindset.

If it's right for you, while it's going to cost more, it's still right for you. So go, and I hope it's going to cost you an absolute fortune once you leave. Because that means you'll be earning a fortune. Well, as ever, we would like to hear from you on the programme today. Students in Leeds can come and see us. We're here, we're opposite the Student Union. Everyone else can email us.

bbc.co.uk or on social media we are at moneybox now with me this afternoon i have louise banahini who is director of educational engagement at the university bethen corner the education officer at the student union and Tom Allingham from the student finance website Save the Student. Good afternoon. Good afternoon. Hello. Thank you for joining us. Tom, paying the loan back for another 10 years before it gets written off.

What will that mean for the finances of this year's Freshers? Yeah, so the important thing to know is that it doesn't have an impact on them right now. This is something that will affect them, you know, during their life as a graduate. But as Martin Lewis has explained there, it now means they will be repaying for 10 extra years with a lower threshold as well. And the long and short of it is that...

The lowest and the middle earning graduates will now repay more, in some cases twice as much as they would have done under the old plan, and the highest earning graduates will actually repay less.

OK, but the amount of interest paid on student loans has been cut under these plans. The Department for Education says that means students won't pay more than they borrowed once you adjust it for inflation. So that is an improvement. That is an improvement. That is probably the one good, good piece of news. from these changes but you know as we've just explained

Overall, students under the new plan will still be repaying, in the vast majority of cases, far more than under the old plan. So, yes, that's one nugget of good news, but overall, it's a pretty bleak picture. Now, just to say it again, this is a big change for students in England specifically. How is student finance different across the rest of the UK?

Yes, so in Wales, they are sticking on the plan that English students were on until very recently. In Scotland, they have a whole new plan all to themselves, slightly lower repayment threshold. And in Northern Ireland, they're on the plan that English and Welsh students... on even before that plan one which again has an even lower threshold.

Thank you very much. Let's hear from some of these brand new freshers. I spoke to Emily and Riley at the Student Union Bar about their university experience so far, although they are only a few days in.

I'm studying maths and music. And Riley, you're the same? Yeah, we're both on the same course. How's Freshers' Week going? I think I'm already ill, kind of thing. How expensive has Freshers' Week been so far? Yesterday I spent... way over budget just alone I think because I also had to get like stuff for kitchens and like doing a big food shop as well I think I've got to adjust to how much I have to

I have to spend. You get here and then you realise you keep needing to buy things as well. Constantly. It's just like random things like tea towels and mugs. Emily, do you think about paying this money back? Yeah, the thought is definitely there.

It's definitely in the back of my mind. Even just seeing the maintenance loan come in into your bank account, it's like, wow, that's a lot of money and I've got to pay that back at some point. And obviously now that you have to pay it back for longer, it's just... I don't know, it feels less accessible. That has concerned me a bit. I'm from London and I've heard that, especially with the cost of living crisis and housing in London going up a lot.

I'm worried that I won't be able to move back there. Have you planned a budget? Have you thought about your spending? Yeah, I think I'm probably going to start planning budgets after Freshers' Week. I'm kind of... I have a bit of extra money from working in the summer so that's giving me a bit more leverage for freshers week but definitely afterwards I'm gonna have to be a bit more strict with it.

Freshers Emily and Riley there. Well, joining me live is Anna, who's in her fourth year of university. Anna, hi. Hello there. Thank you very much for joining us. Now, I actually met you yesterday pulling pints in the student bar. How important is working to managing your... money as a student? Yeah I think working is super imperative for me being able to actually afford anything like

at university. I like to say that my maintenance loan goes towards my rent. I also get a bursary from the student uni so I use that to basically help me with my living costs. But yeah, I would say working is like my little bit of extra spending. money that you know you need when you're a student.

And are you in a position where you can get any help from your family, for example? No, so I'm from a very low-income family. I'm very lucky to be where I am, but I don't get any support financially from my family, and I'm sure they absolutely would.

if they could, but I definitely benefit from the bursary that I get from uni, the maintenance loan, and also working. And there is lots of different kinds of support that parents could give, isn't there? What about Emily and Riley, what they were going through? The change to their finances, would that worry you if you were a fresher today?

Oh yeah, absolutely. I'm very, very lucky that that wasn't the case for me. If I had known when I originally was going to university that I might have been paying for 10 years longer, I might not have even applied. I think that these loans and repaying definitely puts off...

students from low-income families and makes university inaccessible sometimes. We need to educate people that it is okay, a student loan is the best money you'll get really and I definitely still encourage people to go to university but it might have put me off. essentially.

But absolutely, we don't want to put people off this amazing experience. What financial advice do you have as a wise old fourth year for this week's freshers? Oh, gosh, you make me sound old. I would definitely say budget, make spreadsheets of budgeting. and just be careful on what you're spending money on. Don't overspend at a bar or a pub because it's just going to come back and haunt you later on.

Anna, thank you so much. I would love to know how many freshers are making spreadsheets for their budgets. Louise, Anna thinks she might not have come to university if she'd been worrying about repaying the debt for so much longer. Does that concern you?

It does, yes. It's a real worry for us. I mean, fortunately, as you can tell from the buzz around here, it's not put off all students. But I think particularly, as Anna says, the model and the description of loans can feel quite daunting for students. And if you are a student who's coming from a family where you are the first in family, that can feel like a risky venture to go down. And finance, I think, is a lot of people's...

minds. I mean, we walked past a picket line of university lecturers, some of them are on strike, just to get here today. In a time when pay is more important than ever, is there a danger that rising uni costs just put people off? I think so, I think it can be. I think also as well it can drive behaviours in terms of the types of courses that students choose. We see increasingly across the sector the preference to go for perhaps more vocational courses, which are important.

but we know from all the labour market information just how important it is to go through all kinds of degrees. We need graduates with critical thinking skills, problem-solving skills to take on those global challenges that are out there for us. And Tom?

Anna made a really good point, didn't she, that this is the best loan you're ever going to take out. This is a very good way to borrow money for something very important. Yeah, absolutely. So, you know, I made the point that the new plan is more expensive than the old student loan repayment plan.

The fact remains that the repayments are still broadly very manageable. And the fact that you get the full £9,250 to pay your tuition fees up front in full means that, as Anna has said, it is probably the best loan you'll ever get. Yes. In fact, we should talk a little bit about the practicalities, shouldn't we? You don't have to pay the tuition fees up front. The loan takes care of that. And then you don't really have to even think about it afterwards because it just comes...

automatically out. Yeah, absolutely. So yeah, if you are employed, and you know, you're not self employed, it'll come out of your tax return, you don't really have to think about it. You won't repay if you're earning below the threshold. You'll never have bailiffs knocking at your door. It won't affect your credit score. All of these things put together means that, yeah, it really is the best loan you'll probably ever get.

Bethan, a lot of the students I've been talking to around the campus, they just seem to accept that they have to run up these very big loans. This is just part of it. Are they all clear about how it'll be repaid?

I don't think so, to be honest. I think it's a real mixture that we have students that are making those spreadsheets and are really knowledgeable about exactly what they're doing. But I also think that we have so many students coming into university without any clue about what they're about to kind of get involved in.

and it's seen as kind of a natural next step for a lot of students and their finance education before they come to uni really isn't quite what we'd want it to be and so I know for sure that I came to you

without really knowing much about loans and just kind of accepted that that was part of it and didn't really look at any other schemes that I could get involved in that could help me. Now, it's probably easier for these freshers to think more about the immediate costs of uni, isn't it? When I was at uni, all the freshers...

Fresh has got a little book of discounts for the local shops, for the restaurants. What kind of stuff is available here that other people could look out for? And what kind of things are you doing? Yeah, so student unions all across the country are doing so much for the cost of living and for students all the time. So last year we did a free breakfast for students that was hugely popular. But this year we're really looking at everything in a bit of a bigger picture.

recognizing so much more of the wider needs of what students have. So we're working with the university in partnership to ensure that there's so much more consultation and looking at exactly what students want to kind of benefit from.

more educational based things or whether that is more support from our job link service that can give students a better chance of getting jobs help with their CVs things like that we're also focusing on becoming safe warm spaces with microwave showers kind of a home away from

home, we really like to see ourselves. Bethan, thank you. Right, I'm going to move over here and talk to some more freshers. I'm joined by Millie and Elix, who are freshers just a few days into freshers week. How's it going, Millie? Yeah, it's going really good. I'm meeting a lot of new people, just sort of mingling, getting to know the uni, the campus. Yeah, but it's going really, really well so far. Alix, are you having a good Freshers' Week?

I'm having an absolute blast. I've been going to the Freshers Fairs on Monday and Tuesday and today as well. And you can find over 300 societies and it's absolutely amazing. And I love the support and the inclusivity of the uni. I'm very happy and glad to be here. That's the fun stuff. Let's talk about money. Have either of you drawn up a budget? Anna was talking about, or somebody was talking about spreadsheets, having those ready. Have you thought about that, Alix?

I have a little bit obviously with cost of living it's very tricky but I especially with food and groceries I've been trying really to budget and sort of not restrict myself because it's only the first few days in of freshers but definitely towards

this whole year and the next three years, I definitely need to budget, which might be a bit tricky, but I'm trying to. Millie, have you been thinking about budget? Have you sat at home with your spreadsheets ready to go? If I'm being completely transparent, no. But I think I am innately quite a disorganized person. So I found, I feel like the whole juggling my work, my uni work and socializing and stuff already quite stressful concept.

So the whole money thing as well sort of coming in on that is quite overwhelming. You know, my experience already and sort of the idea of getting a job where I've already taken a year out to do that. And I still need more money. So, you know, I'm finding that a bit of a stressful concept. Tell me about the maintenance loan. Is that enough for you to get by? It doesn't cover my rent.

I'm on minimum and I'm about a grand short for my rent. So I probably will need a job. I think I'll get into first term, sort of get into the swing of things and then look for one. But I will need to sort of pull my socks up a bit and get my head. head into the whole getting organised space. You are probably allowed to enjoy Freshers' Week first, aren't you? What about you? Is your maintenance loan, Alix, going to go far enough to cover your costs this year?

I think it will to some extent, but I do feel like I will probably need a bit more support. And I do feel like it's one of those things where if you have to sort of be organized and you have to budget, but I feel like... a bit more support might be required i think for the majority of students so yeah so freshers week you move out from home sometimes you're setting up your flat for the first time have either of you had to buy anything that you weren't expecting some unexpected costs

Definitely, one too many things. A toaster. I was not expecting how much I'm going to miss a toaster, so we're all going to chip in and get that, I think. A waste paper bin. Yep, I've got a Waitrose bag hanging up on my door handle at the moment, and that's doing a good job so far, but I will have to get that. So yeah, wasn't expecting that, to be honest. The Glamour Refreshers Week, heading out to buy a bin. Alix, what about you?

Exactly the same. I mean, we live in the same block and accommodation. So, yeah, a bin. You'd expect a bin in your room, but no, apparently not. And then, yeah, a toaster. Obviously, we're lucky we have flatmates, so we can all, like, share, which is really nice. Yeah, that would be it, I think. Million Leagues, I hope you have an absolutely fantastic Freshers' Week. Thank you very, very much indeed for joining us. Well, there you go. Buy the student in your life a bin. Tom.

Maintenance loans, let's talk about them. They've risen by 2.8% for students in England. That is much less than inflation. What kind of impact is that going to have? Yeah, so as you say, that's... well below inflation and it follows a rise and again this is in england we should say it follows a ride last year of 2.3 which again was substantially below inflation so what that means is according to the ifs the institute of fiscal studies

Students in England are now up to £1,500 worse off every single year. And to put that into another context, our most recent student money survey, which we published a couple of weeks ago, found that the maintenance loan now falls short of living costs by an average of £582 every month. So every month, a student has to find £582. And as we heard from Millie, in a lot of cases, it doesn't even cover rent. Now, I should add, shouldn't I, in Wales...

In Wales, maintenance support is rising by 9.4%. In Scotland, it's up 14%. In Northern Ireland, it's up 40%, but that is from quite a low base. It doesn't just vary, though, across the regions, does it? The amount you get can change depending on where you're living, what your parents earn, all sorts of factors. Absolutely, yeah. So, again, as we heard from Millie, she's on the minimum loan, which suggests that her parents are above the maximum.

kind of threshold but which you get the minimum loan but again that's not a huge amount you know if you earn below a minimum threshold you get the maximum loan and then as you say if you're living inside London or outside London or if you're living at home with your parents all of those factors will affect how much money the government gives you.

Thank you. Louise, the government told us it's making £276 million available this academic year, which institutions like yours can use to top up their hardship schemes. Are you getting more applications for hardship help? Have you made any more available?

We've made more available and we are receiving more applications and giving out more funding as well. And that's for two reasons. Firstly, that there is certainly increased demand for it. And secondly, we've also promoted it more. And that's really as part of our work.

around cost of living where we want to ensure that students who need that funding can access it what's really important though is we want to as far as possible provide that support up front so that students don't reach that hardship threshold so if we can provide it up front before students get into trouble

then that's even more positive for us. Bethan, as part of the union, are students talking to you about the rising costs they're seeing? Yeah, without a doubt. We've had so many requests over the last year. We're really concerned about their cost of living.

our students and there's absolutely no denying that. The student lifestyle has had to change and there's absolutely no denying about that. As we heard the kind of conversations of budgeting for food and shopping and things like that were absolutely already on the topic.

But now having to think about how often they go to socialise, how often they want to join the societies that we're surrounded by, that there are costs behind running these societies. And even our groups of student leaders are struggling to kind of do the things that they are so passionate about.

and providing these opportunities for everyone. It's feeling a lot harder for our students to get that reach, I think. And is it harder? Because the stereotypical student has always been living on baked beans, you know, in a pretty grubby flat. I mean, things have always been quite...

for students is now different. I think it definitely is different. I think that the rent costs are definitely rising and it's been so interesting to see that spread around the whole of the country. We have students not living in the city. a lot more commuting students coming in all the time and it's absolutely having no doubt that students are being impacted and it's becoming a bit harder for them that those beans are becoming a bit more expensive and that bread is becoming a bit more expensive.

The budget that you might make now might not be realistic in six months with the way things are going. Thank you very much. Now, a lot of students will rely on help from parents, maybe grandparents, to help pay for some of their costs. Let's just leave the hubbub of the fresh... his tent and hear from Roy, he got in touch with us about exactly that. Hello there, I'm Roy. My wife and I are in our early and mid-70s. We've got 11-year-old twin grandsons.

the apple of our eyes, and we very much hope they'll go on to university. We helped our children through their university, although we realise it's even much more expensive now. and we'd like to know what's the best way at this stage that we can help them in planning ahead.

There you go, some very dedicated grandparents. Tom, for any family listening who can help and want to help, what's the best way if they've saved up some cash over the years? Yeah, so what I would say first of all, especially in the case of Roy, is that you never know what's going to change with student finance.

that system but let's say for argument's sake that it remains broadly the same situation as now I would say if you have money put away don't put it towards tuition fees because they are currently covered in full by a loan

Don't put it towards student loan repayments because despite the changes, they're still broadly quite manageable. Do put it towards your child's living costs or your grandchild's living costs. That, as our research has found and as we've heard already today, that is the thing that students struggle with on a day-to-day basis.

need the money for. Now, we often hear at Moneybox from parents worried about student loans. We should say it's not a normal loan, is it? For example, it doesn't affect your credit score. No, absolutely. Yeah, I said it earlier. It doesn't affect your credit score. You won't repay if you're earning under the threshold, so you don't have to worry if you lose a job. Your repayments will stop.

You know, all of these things put together mean that in some ways it does operate a little bit more like a tax. Thank you. Louise, it must be really tough for students who can't get any family help. Students like Anna. Yeah, absolutely. And so as Anna says, there is extra funding available depending on students' income threshold. We also recognise how important it is to support students who don't have families at all. So for example, students

who are care experienced or estranged from their families as well. So we recognise that there are different needs there and put funding in place, as well as additional pastoral support. You mentioned estranged family students there. So can they declare that they're estranged and so their family income doesn't get factored into the maintenance loan that they get?

Yes, absolutely. So through the application process, students can declare that they are estranged. And then once they're at university, there is a follow-up process so that students can access additional support. Thank you. care, perhaps a lot of people don't know that there is a great deal of support potentially for care experienced people coming to uni. Yes, there's a huge commitment from the university sector to support groups of students like care experienced and estranged students.

support but there's also a great deal of pastoral support recognizing just how valuable that is i'm going to check back in with anna here actually and as somebody who has come to uni four years at uni which is not cheap with you know a supportive family but not a a family who can be financially supportive. What's your advice for anyone who's kind of in your shoes coming to uni without that financial backing from home?

Just trust in yourself and know that you can do it. You can get through university life. It's really important to know that there is help available. Speak to your union. Speak to the financial team. You can get help and you can get through it. Do what you love. sure you go to uni for that and you've been working alongside your degree but you're still having a having a blast yes absolutely I'm in loads of societies

Anna, thank you very much. Let me squeeze back down. Let's talk about some of what's on offer in Freshers' Week because there is a huge amount to spend your money on. There's also some big brands here on campus literally giving stuff away, handing out freebies. I had a quick look at what's on offer. OK, so you're offering a free game of whack-a-mole and free popcorn. Absolutely, absolutely. We're offering a free game of whack-a-mole and popcorn.

Top score right now is 56, so it's 56 to beat. What are you giving away? Well, there's chocolate, there's... I mean, there's leaflets. So you just have to take a look, really. Everyone likes free, right? That's the best part, that's the best part. Hi, so what freebie have you just bagged? So, scan the QR code and have a free slice of pizza. Delicious, isn't it?

Yeah, I don't think anyone here was turning down the free pizza. Tom, big brands, even local smaller businesses, some of them are offering students some genuinely good deals. They are, yeah. I mean, obviously a lot of big brands that we're aware of, they offer student discount. tip I would give people is that wherever you're going always ask if they do a student discount even if it is a small local independent place.

The absolute worst thing that will happen is they'll say, no, sorry, we don't. And best case, you get 10%, 20% off whatever you're buying. Yes, although we should always make the point, it's only a bargain if you need it. Absolutely. Tom, we mentioned some of the help, some of the support that's available.

support on offer from outside university is there any way people can access that yeah loads of private organizations and charities do offer their own bursary scholarships and grants you will have to search them out you will have to apply for them yourself but it's definitely worth taking the time to do that

Thank you very much. I think we've probably got time for one final financial tip for this year's first years. What is the single most useful thing these freshers can do to manage their money well over the next few years? Bethan? I'd say just talk to everyone around you. You don't know who... who's experiencing something similar around you or has experience that can be able to give you some advice or you could give the same conversations to them. Louise?

Yeah, I would look out for the sessions and events on campus at your university to find out about budgeting tips and the financial support that's available. There'll be loads of top tips out there. Don't assume that you know everything about budgeting. And Tom? Yeah, so following on from what I was just saying.

The bursary scholarships and grants, they aren't just reserved for all the usual things like good grades or low-income backgrounds. There are loads more niche criteria out there. We do cover some of them on Save the Student. But take an hour, two hours, look for that funding. There you go. Some homework to do in Freshers' Week. Well, Freshers' Week is...

He's still going strong, but that is all that we have time for in this Moneybox Live. Huge thanks to the University of Leeds for hosting us and to all the students who took time to chat. And thank you, of course, to our experts. I was joined today by Louise Banahini, Director of Educational... Thank you. Time, I think, for one quick message from Emma, who tweeted to say,

I forgot to choose my electives and ended up studying Old Norse. I love it. Later this week, Paul Lewis is warming up to talk about energy bills as we head into winter. So don't miss Moneybox on Saturday. That's at 12. If there's a topic that you want me... or the Moneybox team to take a look at, then do get in touch with us. You can email us. It's moneybox at bbc.co.uk. Please do leave a phone number if you can. Now I'm off to see if I can join the juggling sock. Have a very good afternoon.

Hello, I'm Dr Michael Moseley and in my BBC Radio 4 podcast, Just One Thing, I'm investigating some quick, simple and surprising ways to improve your health and life. Which will you try? Maybe a cup of tea to help your heart health. Or breathing through your nose to fight off infection. How about a walk on a rainy day? to boost your immune system. So to benefit your brain and body in ways you might not expect, here's just one thing you can do right now. Subscribe to the podcast on BBC Sounds.