Off licences should brace themselves for a run on champagne over the next week or two as A-level results are announced. After the initial celebration, those with satisfactory grades who want to enter higher education will have to start thinking about their courses, which begin in a matter of weeks.
If they have given little or no thought to the financial aspects of university life, they will have to remedy this situation urgently. Certainly, 40something parents whose children are heading off to college will not be able to draw on their own student experiences.
Grants have been replaced by student loans and a contribution to tuition fees has been introduced. The fee contribution of up to pounds 1,025 and around one quarter of the loan is means-tested on the parents' residual income and the student's income.
The good news is that several sources of student earnings are not taken into consideration. Wages from casual or part-time vacation and term- time jobs, the first pounds 820 of their unearned income, pounds 1,000 of any scholarship and pounds 1,855 of any trust income are all ignored. Sums above these figures reduce the student's support pounds 1 for pounds 1. Therefore for most, the level of support received is dependent on their parents' income.
This is based on total gross income from whatever source plus what the Inland Revenue calls "benefits in kind", the value the Revenue puts on company cars and private medical schemes. From this are deducted payments which qualify for tax relief, such as mortgage interest and payments to pension plans. There are other small allowances, for instance, pounds 75 for other children still at school.
The amount which parents are expected to pay for their offspring's higher education is on a sliding scale. Those with a residual income below pounds 17,370 pay nothing, while parents with a combined residual income of pounds 32,000 are expected to pay pounds 1,481.
However, the parental contribution cannot be more than the maximum fee contribution of pounds 1,025 plus the maximum level of means- tested maintenance support to which a student is entitled. Parental contributions are not compulsory.
Details of the scales, allowances and additional payments can be found in the Department for Education and Employment's booklet Financial Support for Students. To obtain a copy telephone 0800 731 9133.
Parents who do not consider they will receive any help for their contribution to tuition fees should nevertheless contact their Local Education Authority (LEA) as soon as possible. This is because applications for student loans are via LEAs. …