Making ends meet

Tertiary students who have to stand on their own financial feet for the first time have plenty of places to head to for advice.

One of their first stops should be www.studylink.govt.nz, the Ministry of Social Development website with information about student allowances, loans and benefits they might qualify for.

The site lists locations of StudyLink offices on many campuses. Applications for allowances, loans and bursaries can also be lodged online.

Chances are you will end up with a student loan: in 2003, 60 per cent of eligible students borrowed money through the scheme. As of June last year, the average loan balance was more than $14,000; three-quarters of borrowers had them paid off within 12 years.

If finances are spiralling out of control, institutions and student associations typically have staff who can offer budgeting advice. Banks, too, are in on the act, many having campus branches.

The National Bank makes a particular effort to court student customers, offering a range of services under the Tertiary Plus brand. They include accounts with no transaction fees, and an interest-free loan offer up to $1000. It also has a fee-less credit card; watch the interest charges, though.

One of the less likely sources of student financial advice is www.sorted.org.nz, the website of the Retirement Commissioner. It has a section dedicated to students, which includes these tips:

1. Borrow only what you need. The more you borrow, the more interest you pay and the longer the debt hangs over your head.

2. Look for additional income. Is there some other form of income out there that will help you reduce the amount you borrow?

3. Know the true cost of your loan. It's not just the sum you borrow, it's the total interest bill and the time it takes to pay off.

4. Know the value of your qualification. Putting a dollar value on your earning potential will help you determine if borrowing for your qualification is money well spent.

5. Pay your loan off sooner. Contribute more than the minimum repayments if at all possible, to reduce your total interest bill.

6. Know your obligations. Be aware that student loans won't go away and you can't get out of them.

7. Do a budget. Knowing exactly where your money is going is the first step toward controlling your spending.8. Avoid high-interest debt. Credit cards and personal loans can be very expensive. 

8. Avoid high-interest debt. Credit cards and personal loans can be very expensive.