As a Canadian, when I finished my post-secondary education, I owed over C$80,000 in student loans. While financing college or university education is normal for me, it can be worrying for many Irish students – and for good reason.
I have been repaying my Canadian student loans, in some capacity, since 2007. However, by 2023 (at the ripe old age of 38) I expect to finally be student debt-free.
While I have been making repayments for nearly 16 years, I have also been paying a very low interest rate. I wasn’t expected to begin repayments until six months past my graduation, and along the way there were supports in place for times when I was struggling financially. As my earnings increased, my student loan became a monthly passive cost – like paying my phone bill.
Irish banking institutions are currently offering loans of up to €50,000 or more, with students (or their guarantors) expected to repay over the terms set by the bank. With continued cost of living increases, post-secondary students may need to take out larger loans from financial institutions to cover their education and housing costs.
SUSI (Student Universal Support Ireland) grants can help students who meet the right criteria. The Department of Further and Higher Education, Research, Innovation and Science (DFHERIS) tells Irish Country Living that, as part of Budget 2022, an additional €15m was secured to enhance the existing financial supports under the Student Grant Scheme.
“For the academic year 2022/23, this will mean an increase to all student grant maintenance payments of €200 per year, the income thresholds to qualify for the standard rate of student grant have been increased by €1000, [and] the distance criterion for students to qualify for the non-adjacent rate of grant has been reduced from 45km to 30km,” a department representative writes.
In addition, it was announced that beginning in the 2023 academic year, the maximum earnings for students during academic break periods will increase from €4,500 to €6,552. This means students will be able to earn more without their student grant being affected.
Credit Union loans
Irish Country Living reached out to the Irish League of Credit Unions (ILCU) to get its take on student financing. Head of ILCU communications Paul Bailey says credit union student loan offers are set depending on the location, but many will allow loans from between €500 or up to €30,000.
“For any loan, ability to repay is the key consideration in deciding whether or not a loan is approved. A credit union might require a guarantor for the student loan,” he explains.
A 2021 survey carried out by the ILCU and SpunOut.ie (Ireland’s youth information website) found that nearly half of all college students struggle to afford living expenses. The survey found that 88% of students worry about money, while over 40% experience constant financial stress.
“Getting a loan can be really helpful when it comes to paying for third-level costs, but it’s really important that students know who they are borrowing from, the terms of the loan, and the interest they will pay back,” Paul says.
As a result of the survey, SpunOut.ie has developed a helpful online content series which addresses the main financial concerns of 18- to 25-year-olds. While each credit union sets its own local interest rates, Paul says many offer discounted or low interest rates on student loans.
“As an example, Bantry Credit Union in west Cork offers a student loan at 3% (3.04% APR), Ballyshannon and Killybegs Credit Union in Donegal offer student loans at 4% (4.07% APR). Similar rates are available from credit unions across the country and students should contact their local credit union to find out their student loan rate.”
Bank of Ireland (BOI)
BOI offers loans for undergraduates, postgraduates and graduates. ?BOI also offers competitive rates for educational purposes via a personal loan for up to €65,000.
Neither types of student loans require co-signers. The postgraduate loan previously required a guarantor, but this aspect was removed in July 2022.
€5,000 (over five years) – 5.0% APR (variable) – Monthly repayments of €94.20 – Total amount repayable €5,652.00
With a Student Plus account, students can borrow up to €50,000 with loan terms of up to five years. Full-time students require a guarantor. A student contribution charge loan can provide up to €3,000 per year (for four years) to cover school-associated fees. While studying, you make interest-only repayments. You start making full repayments once you are finished college (loan terms up to five years after course ends).
€5,000 (over five years) – 8.45% representative APR (variable) – Monthly repayments of €101.65 – Total amount repayable €6,099
To avail of a loan from a credit union, a student must be a member of that credit union. Joining can be done quickly with correct identification and proof of address. Once a member, you can apply for a loan immediately. All credit unions are different, but many allow loan applications online or over the phone with quick approval times.
€5,000 (over five years) – (average loan interest rate) 7.63% APR – Monthly repayments of €100.50 – Total amount repayable €6,029.93
This is not a traditional student loan route, but An Post offers low-rate fixed loans which can be an option for students. Their online loan calculator will provide an idea of what kind of terms to expect.
€5,000 (over five years) - *from* 10.4% APR (fixed) – Monthly repayments of €105.99 – Total amount repayable €6,359.40