How parents can reduce student debt

Some university halls provide contents cover (including some at Aberdeen, Surrey and Westminster), but many do not. Parents may be able to cover their children by extending their own contents policies - or they might suggest buying a separate policy.

Students with cars need to tell motor insurers when they change address. Insurers could turn down a claim if, for instance, a student is no longer living in a hall of residence (and parking in the safer environment of a university car park), but living in a flat in town and parking in a back street.

Tenancies

When students move from a hall of residence and into a flat, parents will often find themselves being guarantors on the letting contract - some landlords insist on this. If you are a guarantor, make sure you see the paperwork (and, if possible, the flat or house), as you are liable if your child or the other tenants default on the rent. Even the most sensible 20-year-olds will struggle with the legal and financial implications of renting a property. Are the names of all the tenants on the contract - not just one or two who would end up being liable if the others default? If the contract is for a year, can you negotiate for it to exclude the summer holidays if your child is unlikely to be in the flat then? (You obviously have more bargaining power in locations where there is a glut of rented property.) Has the landlord fulfilled all legal obligations - gas safety certificate and complying with the tenancy deposit scheme? Is the equipment provided in good order - and what happens if the washing machine or cooker breaks down? How will your child and their flatmates organise paying the bills? 'You should all have your name on the account,' says Anne Morton of British Gas. 'The name on the account is the person who is liable to pay.'

Get help

Impress upon your child that they must come to you or to university welfare advisers if they ever want to discuss money. When people get into difficulties, the turning point is usually when they face up to the problem.

If your child does end up in debt, don't despair. Tina and John's daughter got to grips with her problem, began repaying when she got a job, paid off most of it in a few years and became a much better money manager.

Funding facts

· Fees charged for undergraduate courses will be £3,070 in 2007/08. Students can take out a loan from the Student Loans Company to pay these fees, which they start repaying from the April after graduation (if they are earning £15,000 or more a year).

· Loans for day-to-day living of up to £5,085 in 2007/08 (for those studying in London but not living at home) or £3,280 (for other students in the UK not living at home) are available from the Student Loans Company. Interest is payable at 4.8 per cent per year. .

· Grants of £2,765 are available to students whose families have income of under £17,910. Smaller grants are available where income is under £38,330.

· For more information go to www.direct.gov.uk - then click on education and learning. The site has a calculator for loan and grant entitlements. Applications can also be made online.