Is student debt unavoidable? The answer to that is two students from the same background doing the same course can end up with very different levels of debt.
Many students and their parents see large debt as inevitable. Others were working their rear ends off to pay as they go and minimise debt.
The difference, says Penny Lyall, advocacy coordinator at Massey University's Albany Students' Association, is preparedness.
• Premium - Diana Clement: Improve your financial future
• Premium - Diana Clement: How to learn better money habits
• Premium - Diana Clement: How to make every dollar count
• Premium - Diana Clement: 15 things I have learned about personal finance
When Lyall interviews students in advance of budgeting seminars and clinics and looks at their bank statements she invariably finds entries for takeaways, streaming services, brunch, coffee, tattoos, manicures/pedicures, iPhone contracts, and more.
The difference between students racking up big debt and those living within their means as best they can is extraordinary, she says. Some don't understand the long game of being able to survive, pay rent, and get their degree and instead focus on shorter-term rewards and gratification.
At the other end of the scale, one student looking to leave university with as little debt as possible is third year Theo Hoyte. Paying no fees in the first year of his BA helped. Savings from his part-time job on the living wage at the Devonport Community Recycling Centre pays his $7000 per annum fees. He lives at home, but pays board from his earnings.
Hoyte spends modestly, although he does buy lunches and occasionally dinners if he has a late lecture at Auckland University, where he's studying. That can range from a $3 pie to $10 at Subway.
Leaving home for university can be an expensive move. It costs around $12,000 to live in halls of residence in the first year and perhaps $8000 thereafter on flatting. For students who can't stay at home or study the course they want locally, these are essential expenses. For others it's a lifestyle choice, which for some is a rite of passage.
The choice to stay home was one that AUT design student Tessa Wishart put thought into. Instead of the halls experience she chose to do an exchange to Canada in her final year, which she can afford if she lives at home.
Wishart works part-time during term and full time over the holidays, as well as babysitting and sewing. A big part of her strategy to leave university with no debt was to apply for scholarships. She qualified for New Zealand Scholarships in four subjects and an AUT academic scholarship, which together pay all of her fees.
Not everyone can qualify for academic scholarships. The Generosity New Zealand's givME database lists more than 4000 scholarships including many based on non-academic factors such as location, ethnicity or financial hardship.
Otago University's director of student experience Stephen Scott encourages students to finish their degree in the minimum length of time. Make sure you pass your papers, he adds. Seek help from academic staff and/or support services on campus if you're struggling.
Other tips include:
• Seek career advice before choosing your course so you have clear goals for being at university. "Students who know what they are aiming for do better," says Scott. Schools and universities offer career advice and can help clarify your goals and choose papers/courses to match them."
• Review and reflect on your studies often. Is the subject interesting and can you imagine yourself working in the field in five years' time. You don't want to end up with debt, but no degree.
• Work part time. If possible work in a field related to your degree and/or a job that develops transferable skills. Scott recommends checking if your department has work available.
From a specifically personal finance point of view I would add:
• Divvy up your weekly income into parcels (AKA budget). Pay your fixed costs such as rent, transport and food basics first. Then assign fun money for non-essentials. This is the best way to keep your weekly expenses under control.
• Keep a spending diary and learn from it. Note down every last cent you spend. At the end of the month add up each category. Then reflect on the effectiveness of the spend in each.