The next academic year looms ahead, and with it the challenge of funding university.

Studying in England will no longer attract a maintenance grant following the Chancellor's emergency Budget, though loans will be more generous.

But it may come as a surprise to realise that Scottish graduates starting on a salary of under £32,000 will end up repaying exactly the same amount of debt as their English counterparts who have borrowed an extra three years of tuition fee loans – because new student loans are wiped off after 30 years.

While Scottish courses escape the English tuition fees of £9000 a year, seven out of 10 students at our universities borrow the full maintenance loan of £5750 a year.

So while English students could graduate with over £44,000 of debt, their Scottish counterparts may run up ‘only’ £23,000.

But the 30-year cut-off means only those on the better incomes will have to repay the higher amounts borrowed.

According to student finance campaigner Martin Lewis, that means fears about large debts are exaggerated.

His moneysavingexpert website’s calculator allows you to enter your total student loan, and your likely starting salary, which is then projected forward assuming three per cent inflation and your salary growing by five per cent a year as your career progresses.

You have to enter a starting salary of over £32,200 to be worse off in England. Up to that level the amounts repaid on borrowings of £23,000 (Scottish four-year course) and £44,250 (English three-year course) are the same – around £44,300 in forward prices, or £32,290 in today’s money.

The Scottish Government has said the average cumulative debt for a Scottish student is currently £7600 against over £20,000 in England.

But according the Institute of Fiscal Studies, only five per cent of UK students are likely to repay their loans by the age of 40 and nearly three out of four will have some debt written off in the 30-year amnesty.

Taking on student debt means you will be paying interest from day one at a rate three per cent above retail price inflation, currently calculated as 5.5 per cent throughout your studying. Those graduating from four-year Scottish courses this summer had it far easier – a rate of only 1.5 per cent, which came to an end in September 2012.

But since then, the new higher rate will apply after graduation too, though on a phased basis, so only part of the RPI top-up applies to the each £1000 of earned income above the minimum £21,000 - below which no interest is repaid at all.

Above that level, your employer will deduct nine per cent of salary and pay the Student Loan Company directly - on £22,000 a year it equates to £7 a month and on £30,000 it would be £67 a month.

Latest annual student debt research by the Association of Investment Companies (AIC) Research suggests nearly two thirds of parents are either planning to, or already do, contribute financially to help their child pay for university. This rises to 70per cent amongst the better off parents, compared to 50per cent amongst the less well off. Financial contributions mostly come in the form of cash savings, with 61per cent of parents saying they will use some of their cash savings and over a fifth (22per cent) prepared to suffer financial wipe-out and use all or most of their cash savings.

One fifth of students have lived or currently live with their parents during term time for financial reasons, and this increases to 36per cent amongst Londoners and 30per cent for students from lower income groups.

Grandparents are increasingly filling the gaps. Some 20per cent of grandparents will be helping financially with university costs, to an average tune of £2,540 per year – a rise of 40 per cent on the AIC survey last year.

Whilst nearly half of students regard their university costs as top priority for any family financial contribution, 31per cent would prioritise help towards a first property, nine per cent would prefer help towards a car and six per cent cited their travelling ambitions.

Annabel Brodie-Smith at the AIC says: “Whilst parents are hugely underestimating student debt levels, there’s no doubting that many are prepared to make very real sacrifices to help their children through university. But students are making sacrifices too, with a fifth of students planning to live at home during term time simply due to financial reasons and a number considering dropping out altogether due to the cost. Historically, university hasn’t just been about education, but about the life experience and opportunity to ‘fly the nest’.”

A sales pitch it may be, but investment trusts do offer a time-tested way of building up a long-term savings pot.

Brodie-Smith says: “With a little forward planning, some of the drastic sacrifices could be avoided. A £50 per month investment in the average investment company has grown to over £29,000 over 18 years in share price total return terms.”

CASE STUDY

Ciara Docherty is entering her final year at Glasgow Caledonian University, studying computer game art and animation, with her finances in better shape than they have been for some time. She says: “I was getting financial help from my parents but that was just enough to cover the rental costs. At the end of my second and halfway through my third year I was quite a way into my overdraft and with no income, the number was growing steadily worse. Student overdrafts are helpful but they are deceptive and you will have to pay that money back.” Ciara got vital help from the university’s Discretionary Fund, and also values the guidance of the Save the Student website. “It gave me the hope and motivation to work for the rest of the year, and now my bank account is in the plus numbers and I don't plan on it going under again.”