A good degree and a pounds 20,000 debt

When the parents of today's teenagers went to university, thoughts about money usually meant simply the grant - and how to make it last until the end of term.

If the cash ran out a couple of weeks before the vacation, there was always the chance of a couple of nights' work in the union bar - and of course a quick phone call home would often produce at least a modest cheque.

Today it's a different story. The value of the grant is shrinking - and many families on average incomes are shocked to discover that their children will no longer qualify for more than a nominal grant, if any.

To make matters worse, there is the growing fear that at least some universities may start to introduce tuition fees.

If you have a child who is now in the lower sixth, be aware that the prospectuses for September 1998 entry to six leading institutions - Oxford, Cambridge, Durham, Nottingham and Bristol universities and the London School of Economics - include a "wealth warning".

In effect, they are saying to students and their parents: "We don't know if the Government will let us charge - but if it does, we probably will. If you won't be able to pay, don't bother applying."

The Committee of Vice-Chancellors - in effect university managing directors - are generally in favour of tuition fees. But Sir Ron Dearing, chairman of the Higher Education Funding Council, who is advising the government on the issue, has not yet committed himself in public. The truth is that there is still no clear idea of how student finances will work beyond the next couple of years.

But whether tuition fees arrive or not, the education world is unanimous in the view that higher education costs are rising - and that students and their families will have to foot a bigger share of the bill. As one admissions tutor put it this week: "The only sensible advice for parents is to plan for the worst."

Around 40 per cent of students have part-time jobs during term-time, and many more work every vacation. Yet 87 per cent of students still get into debt.

Increasingly, parents have to contribute to the cost of higher education. But what are the costs - and how much help can you expect from the Government?

At present students receive two forms of support from the state. The local education authority (LEA) will pay tuition fees to the institution and a maintenance grant direct to students to cover all their expenses.

The maintenance grant is means-tested and is based on the income of the parents. In the case of mature students, it is the individual and his or her partner to whom the means test is applied.

The maximum grant is pounds 2,150 a year for students in London and pounds 1,710 a year elsewhere. The means test operates broadly on the same lines as welfare benefits; it allows for household and family expenditure, and classes the remainder as residual income. If the parents have a joint residual income of pounds 16,050 or more, the grant is reduced.

To supplement this, student loans are available. The maximum loan is pounds 2,035 for students in London and pounds 1,645 for students studying elsewhere.

The National Union of Students estimates that the minimum a student living away from home can survive on living in London is around pounds 5,200 a year, and outside London the figure is pounds 4,300. So even if a student received a full grant and the maximum loan, there would still be a shortfall.

In fact, many students do not qualify for the maximum grant, and many find their living expenses, which include accommodation, foods, books and travel, exceed the NUS minimum.

If the maintenance grant system is scrapped, as many expect it will be in the future, Barclays Bank estimates that the average student would owe pounds 20,625 by the end of a three-year degree course.

Many would be put off going on to further education if they thought they would have to borrow this amount.

Increasingly parents are funding their children's education without expecting repayment. If the maintenance grant scheme is to be further reduced or even scrapped, parents may well need to start saving several years in advance.