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Tuesday, 31 December 2013

Paying For College in the US vs. the UK

Whether you're a young UK student dreaming about the Big Apple, or a US student considering Oxbridge, you need to consider how you're going to pay for your overseas college education. While some of the expenses you have in college are the same whether you attend in the US or the UK, there are a few significant differences that you need to take into account when making your decision.

1. Tuition costs

It's no secret that American universities are some of the most expensive in the world. Whether you are an
American citizen or a UK student hoping to study at one of America's world-renowned schools, you have to be prepared to pay over $50,000 per year in tuition costs, or to take on significant student loans.

On the other hand, UK universities work hard to keep tuition costs minimal. For many students, UK university tuition only costs a few thousand pounds. Foreign students are required to pay an additional overseas tuition fee, bringing the tuition up to, on average, £11,000. Even this additional cost, however, still makes the UK university much less expensive than its American counterpart.

2. Living expenses

Students considering studying abroad also have to take in account the difference in cost of living. American universities are centred around student dorms and dining hall meal plans, which cost thousands of dollars each semester and are not included in tuition.

The UK student's cost of living is slightly lower, but still must be considered when evaluating expenses. To get a UK student visa, for example, you must be financially able to support £800 a month in living expenses, or approximately £3,200 per semester.

3. Part-time jobs

80% of American students hold part-time jobs, and the entire university structure is centred on allowing students to balance work and study obligations. UK students are also taking on part-time jobs, though at a lower rate than their American counterparts. If you are planning to work while you are a university student, especially if you are studying abroad, it is important to learn exactly what types of jobs you can and cannot do on your student visa.

Even if your financial situation does not require that you work, getting a part-time job can have significant benefits. You’ll learn how to function on a job and how to work well with others. Plus, the money you earn can help cover the cost of your college expenses.

4. Bank accounts

Whether you receive regular money from your folks or you have a part-time job, opening a bank account is one way to manage your money. Yes, it is possible to open a US bank account if you are a UK student, and vice versa. It will help you when you need to retrieve cash from an ATM, or make payments in local currency without worrying about an exchange rate. And with your money in an account, you're less likely to spend on frivolous things, such as shopping and clothes.

But don't just open a checking account; consider other options like a regular savings account or a CD. A savings account is a good option, but if you want to earn a higher return on your deposit, a CD might be a better match. Depending on where you bank, CD rates can go as high as 1.00% APY. However, Discover Bank notes that CD interest rates can vary depending on the length of the CD that you take out.

5. Cultural experiences

Financially speaking, it's tempting to try and keep up with your friends. If they're able to go shopping or eat out on a regular basis, you may feel left out by not attending. It's also important to take advantage of the cultural experiences in your new country; would you really want to spend four years in New York City without ever taking in a Broadway show, or live in London without ever visiting the Victoria and Albert Museum? However, if you develop a habit of spending money just because your friends can, you could end up with a lot of debt and not enough cash to meet personal obligations.

Each month, set a budget and determine how much you're able to spend on extras such as entertainment. A good budget will help you enjoy the cultural experiences you want to have, while still ensuring you can pay all of your bills.

When you decide to study abroad for your university experience, you open yourself up to a world of new possibilities. Knowing as much as you can about the finances before you start will help you make smart choices and graduate from your chosen university ready to take on the next stage of your life.