Banks and students are, at first glance, unlikely bedfellows. Banks tend to like people who save their money, invest a little in PIPs and PEPs, borrow sensibly and generally think about their finances in terms of rainy days.
Students, by contrast, don't usually have significant sums to save - and their investment portfolios are limited to being non-voting, non-earning shareholders in the local bar. Where students are concerned, banks are in there for the long haul. Third-level students will, they hope, go on to become productive members of society who earn a decent wage and look favourably on mortgage pension plans. The first step on the road to such financial well-being is the student bank account.
For the student, the relationship with the local student office is an important one: the bank is a place to lodge a grant cheque and savings, but can also provide a loan when grant cheques are late or a student is finding it difficult to make ends meet. Add travel loans, overdrafts and "free banking" - including commission-free travellers cheques for summer work abroad - and you might find that maintaining a good relationship with a bank's student officer is a matter of some urgency.
The main banks offer various incentives to student customers, including travel vouchers, phone cards and student cards, to encourage them to sign on the dotted line. In addition, the rate of interest on loans and overdrafts can vary considerably (see panel). For example, Ulster Bank offers an interest-free overdraft of £300, a practical, low-cost means of tiding students over while they wait for delayed grant cheques.
Managing your finances properly will make third-level life considerably easier. Both banks and students' unions advise all students to sit down and plan a budget for the week, including bills, socialising and travel. It may sound like an obvious thing to do, yet most students simply fail to do it. A rudimentary budget will give you some idea of the shortfall between your grant and your actual living expenses.
"If they get a grant, it's going to be given to them in three sections," says Noel Clarke, welfare officer with the Union of Students in Ireland. "They should divide that instalment by 10 to give them an idea of how much it's worth per week - £45.13 for a student on a maximum non-adjacent grant. That's only going to cover rent and bills. They may have to take a part-time job to make up the difference; if they do, they should consider how that is going to affect their study."
To recap: under the current grant scheme, the most that a student living away from home can expect to receive in grant aid is £1,625, while a student living at home can expect to receive £647. The reality is that, according to figures from Dublin City University, the real cost of eight months in college is £4,022 for a student living away from home and £2,302 for a student living at home. The Union of Students in Ireland offers higher estimates: £4,918 for a student living away from home and £3,166 for a student living at home. In fact, USI says it is more accurate to estimate costs over nine months, rather than eight, to take into account the earlier starting times in some colleges and rent payments over the holiday periods, bringing its totals to £5,517 and £3,546 respectively.
Bearing those figures in mind, at some point students will have to look to parents, banks or part-time work to support themselves while in college.
In loan terms, it's also worth considering a credit union account; interest is roughly 1 per cent per month on the outstanding balance, but you will be limited to 1.25 to 1.5 times the amount lodged in your account.
While some students may prefer to stay with their family bank, it is worth shopping around if you're considering opening a new account. Bear in mind that this is a relationship which you will probably continue after graduation and into your working life. In other words, it will last longer than most of your other relationships in college.
