Almost lost in the middle of our own ‘circuit breaker’ lockdown, and the seemingly endless UK Covid updates was some excellent news for local students.
Thanks to a new agreement between the Manx and UK Governments, English universities have agreed to charge Isle of Man residents UK rates, rather than the more expensive International rates.
It is hoped that this will eventually extend to universities in Scotland, Wales and Northern Ireland.
Whereas many universities had allowed IOM students to pay UK rates, some including Cambridge and Imperial College London charged international rates, potentially tripling costs.
As the impact of Brexit and Covid hits universities, there was always the risk that more would start charging Manx students higher rates.
The numbers below are based on a student meeting the Isle of Man Government’s eligibility criteria. In broad terms, this is those who have been ordinarily resident in the Isle of Man for the previous four years and who are looking to study an approved course.
Tuition fees are currently up to £9,250 per year. All Isle of Man resident students must pay at least £2,500 per year towards their tuition fees.
A government loan of £7,500 is potentially available to fund a three-year course with repayments starting once the student’s annual income reaches £25,000.
The Government’s contribution of £6,750 is reduced where family gross annual income exceeds £112,000. Where income exceeds £132,000, no support is available.
Maintenance grants are intended to help with living costs.
An annual maintenance grant of up to £7,500 may be available. However, this is also means-tested, but at a much lower rate.
Income over £17,000 will see a proportionate reduction with no support available where income exceeds £61,795.
The payment table can be found here: How to calculate the amount of maintenance
Actual living costs vary greatly depending on location and lifestyle. Published university estimates range from £8,500 to £10,500 per academic year.
For Manx students, additional consideration should be given to the cost of travel on/off island and the likes of other accommodation or storage costs between terms.
What does this mean?
Personal loans are an option. A part-time job might also be an option for a student to top up their income.
But for those looking to save in advance, it helps to have an idea of the numbers.
For those entitled to maximum Government support, and who take a student loan for their fees, parents need to be saving enough to support additional living costs, travel expenses (including the initial move over) and an emergency pot for unexpected expenses, sports/social trips etc for the duration of the course.
For those who aren’t entitled to any Government support, £20,000+ per year is a good starting point.
For parents with more than one child expected to be at university simultaneously, those looking to study abroad or those considering longer courses/Masters etc. savings pots need to be more substantial.
The full economic cost of Covid is still to be determined. However, we know that the initial IOM recovery fund was set at £100 million, with a £250 million revolving credit facility.
I would hope that education funding will be left alone when the Government starts recouping the cost of Covid. However, we always promote prudent planning and where possible.
It might be preferable to save enough not to be completely reliant on government support at the current generous levels.
At worst, any excess savings could easily be repurposed to help get them on the property ladder – or to enjoy a bit of role reversal and treat yourself to a lovely relaxing holiday whilst your child is studying hard!
If you would like to discuss the benefits of making a financial plan for your family’s future or to talk to us about our regular investment solutions, please contact us.