By Jenny Darmody
Only four mainstream lenders are offering loans to cash-strapped students. A recent survey in the Irish Independent revealed that only AIB, Bank of Ireland, Ulster Bank and Credit Unions offer loans to students.
Both students and parents are under pressure to take loans out to pay for college costs as high as €10,000 a year, a recent survey has shown.
The survey carried out by the Irish League of Credit Unions (ILCU) found that 90% of parents support their children through college.
The increase in registration fees this year will put even more pressure on parents and students.
While Credit Unions offer rates as low as 4.1%, students must have half of the amount they want to borrow in their accounts. Meanwhile, Ulster Bank offers loans of up to €2,700 at a low rate of 6.85%, although guarantors may be required.
AIB requires guarantors for all student loans, “in addition to normal lending criteria,” said an AIB spokesperson. However, its student loans have a 1.5% discount on its regular personal loan rates, which puts it at just under 10%. AIB also offers students an interest-free overdraft of €1,500.
Bank of Ireland has the highest rate at almost 12%. However, it offers a nine month, interest-free student travel loan and only requires a guarantor for loans above €1,000.
While Ulster Bank appears to have the best lending ability, every student’s needs vary greatly and each lender has different offers.
However, it is unlikely that students will receive loans without guarantors or without being a customer for at least three months.
In addition, if students are looking for loans to pay for their college costs, they may need almost €900 a month, excluding the registration fee of €2,000. “The increase in registration fees this year will put phenomenal pressure on both parents and students starting or returning to third-level education,” said Kieron Brennan, chief executive of ILCU.
The added financial pressure is also due to fewer students in parttime work who are unable to support themselves. The ILCU survey showed just half of students had part-time jobs during the academic year while a third of these admitted to skipping lectures for work.
Although grants can be a massive help in paying for student finances and are often necessary, there were lengthy delays in issuing cheques to students last year. Gary Redmond, president of the Union of Students Ireland urges students to apply as early as possible to avoid delays. “The grant scheme was published a lot later than usual this year and this has meant students are applying later…the earlier you apply the more likely you are to get your payment on time.”