The cost of college education has always been a concern for parents. It’s easy to see why, with an average outlay of €10,000 a year to get your son or daughter through third level education. But remember, this is an average estimate, so the cost in your own particular circumstances may be higher or lower.
To get a fix on how much you should be planning to finance during college years, ask yourself these five key questions.
1 Will there be a need for accommodation?
If you are living in Dublin and your child goes to a college in the city, then accommodation will not be an issue so you can consider yourself relatively fortunate. The mandatory student contribution is €3,000 per annum. Add a further €1,500 to cover transport, books/materials and the mobile phone, and it is possible to get through the year on €4,500, although that’s cutting it back to the absolute bone
If you live in a rural location, however, and your child needs to go to one of the major cities, then accommodation becomes an issue on two fronts - finding it and paying for it. The average cost of student accommodation is around €4,000 per year. Add in the costs for utility bills and food and you are looking at a revised figure of €5,500 per year. And if your child plans to go to a college in Dublin, you can add another €2,000 to the accommodation cost.
2 Have you applied for a grant yet?
Thousands of students qualify for a SUSI grant each year, and this can make a huge difference to the real cost of going to college for non-agricultural studies. SUSI (Student Universal Support Ireland) is Ireland's national awarding authority for all higher and further education grants and you can apply right now for the 21/22 academic year.
The closing date for priority processing is 8th July 2021 for new applicants, although you can still apply for funding after these dates – but without the benefit of priority processing. You can apply on www.susi.ie, and the grants are broken down into the following categories, all of which can make a massive difference in your net outlay.
3 Is your child studying agriculture?
In 2012, the Teagasc Authority approved the introduction of means testing of maintenance grants for students attending Further Level Courses at Teagasc and Private Agricultural Colleges, and means testing will apply to Teagasc Level 5 and Level 6 full-time courses for the academic year 2021/2022.
Teagasc student maintenance grants are paid through Teagasc, and the grant scheme is managed by Teagasc. The Teagasc grant scheme is implemented along the lines of the National Student Grant Scheme 2021, but differs in respect of what 'add backs' are used to determine overall reckonable income.
It’s important to note that applicants cannot apply to Student Universal Support Ireland (SUSI) to be means tested for a Teagasc Student Maintenance Grant. It’s also worth considering if you have the best structure in place to avail of any supports that may be on offer. For example, it may be more advantageous to be structured as a limited company or a partnership – we’ll be happy to advise you on this.
All queries on Teagasc Student Maintenance Grants should be directed by email to firstname.lastname@example.org or you can phone them on 1890 261000.
4 Will your child’s accommodation needs change after Covid?
For those who would definitely have needed accommodation up to a couple of years ago, this has possibly changed as a result of Covid. While most colleges are talking about having their students back on-campus this coming September, there will very likely be the option of remote learning or a hybrid of on-campus and remote classes. If that turned out to be the case, you could potentially explore a standing Airbnb arrangement for two to three days a week, rather than expensive permanent accommodation away from home.
In fairness, your child will have a lot to say on this matter. For many, the chance to spread their wings and live away from the apron strings is a big part of the enjoyment of college, so it’s very much a family decision as to which route you should go down.
5 Have you explored your various financing options?
Many farming families will manage by using their monthly income, along with any small savings they may have. For an estimated 50% of families, however, a small loan will be required. If the financial burden of college is still a few years away, then saving regularly may be the answer.
To give you an idea of how this might pan out, saving €400 per month over 6 years on deposit, with an average of 1% growth per annum, will give you an estimated pot of €29,668. The same savings invested in a fund with a 4% net return, would increase the pot to €32,489.
Obviously, the return you get on your savings can make a big difference, so the type of account that you opt for is really important. Short-terms savings (i.e. less than five years) are best suited to a deposit account, perhaps in your local Credit Union. If you have the luxury of a longer period, however, then you could consider a savings plan that invests in growth assets such as shares or property.
It can be challenging to find the savings or investment vehicle that works best for your college financing needs, but if you’re in any way unsure, contact us for help with your Financial Planning.
And one last point to make before we sign off on this subject. Remember that if you have a child who’s smart enough and sufficiently committed to tackle the challenges of college, you should consider yourself as one of the lucky ones! So despite the financial outlay involved, it’s a hugely exciting time that can have a lifelong impact on anyone who gets the opportunity to enjoy third level education.
We wish the very best of luck to all our students, whether this coming September or in the years to come!