Students: How to Get Through Your Degree Without Finishing It in Debt

A typical household or personal budget focuses on a monthly view: how much money came in this month versus how much went out. For students, this narrow view is simply not enough and creates financial blind spots. The academic and student calendar moves in waves and inconsistently:

• In September–October: tuition or advance payments are due, and sometimes a computer or expensive equipment must be purchased.
• In January–February and June–July (exam periods): the number of work shifts drops dramatically, and students work less.
• During the summer months: there is an opportunity to work full-time and significantly increase income.
• In between: variable events arise, such as a friend's wedding, a short trip, or moving apartments.

Therefore, the right strategy is to manage a semester-based and annual budget. List in advance all the income you expect throughout the entire year, alongside the major and fixed expenses you know are coming. If your annual tuition cost is 12,000 ₪, do not treat it as an "October problem." Proper allocation means setting aside 1,000 ₪ each month throughout the year for this item.

A scholarship is probably one of the best investments of your time.

Thousands of different scholarship tracks are available based on diverse criteria: socioeconomic status, geographic location, parents' country of origin, specific field of study, academic excellence, research, community volunteering, military or national service, and more.

Do not settle for one superficial check. Research thoroughly through the student union, your educational institution's website, the local authority (many municipalities offer scholarships to their residents), philanthropic foundations, and programs designated for different groups. Yes, the process requires bureaucracy—filling out forms, collecting certificates, and writing application letters. However, if investing five hours in gathering forms yields a scholarship of 5,000 ₪, that amounts to an hourly wage of 1,000 ₪—a highly worthwhile job.

Work during your studies should fit your lifestyle and academic schedule.

Sometimes a job that pays a little less per hour but allows you to work more during breaks and less during exam periods is preferable to a job that offers no flexibility.

In addition, as you advance through your degree, it is advisable to look beyond the immediate paycheck of the coming month. Finding a student position in your actual field of study—even if the pay is basic—is worth its weight in gold in the long run. It gives you:

• Essential practical hands-on experience in the field.
• Professional networking with people in the industry.
• A critical and meaningful line on your résumé.
• A smoother landing and a much easier, faster entry into the job market once you receive your degree.

Yes, coffee and eating out add up.

But for most students, the truly large expenses lie elsewhere: housing and transportation.

The financial gap between living alone in a rented apartment and living with roommates, choosing a trendy and expensive neighborhood versus a slightly more distant area, or deciding to own a private car versus using public transportation can amount to a difference of thousands of shekels every month.

Before you beat yourselves up over buying a latte for 15 ₪, sit down to make the truly big decisions:

• Do the educational institution's student dormitories offer a more cost-effective alternative?
• Is it worth living with roommates?
• Is there a realistic option and/or willingness to live with your parents for a period?
• How much does owning a car really cost, including insuranceA contract under which an insurance company undertakes to compensate the insured in the event of damage in exchange for a periodic payment., fuel, maintenance, and parking?
• Is an inexpensive apartment far from campus still worthwhile after factoring in travel costs and time?

Your student ID is not just an entry card for the library; it is a consumer tool that provides significant discounts on public and private services.

Public transportation

Israel's public transportation networks offer a dedicated student profile that provides significant discounts, alongside especially worthwhile semester and annual arrangements for those who commute to and from campus every day.

A standard student profile currently provides a fixed discount of 33% on travel. Make sure your profile is updated in travel apps or on your Rav-Kav card, and do not keep paying full price out of habit or laziness.

Municipal property tax

Many students are convinced that simply being students entitles them to an automatic exemption or discount on municipal property tax payments.

It is important to be precise: no such automatic discount exists. Eligibility for a municipal property tax discount is based on a strict income test and the specific rules of each local authority.

If you live in a shared apartment, it is advisable to check with the municipality's collections department how it handles and calculates each roommate's relative share of the apartment in order to receive a discount according to their income.

Bank accounts and fees

Proactively check whether your bank offers a "student plan" exempt from basic current-account fees, which fees you actually pay for transactions, and which benefits truly remain on the account when the promotional period ends. Do not assume in advance that an account labeled a "student account" is the cheapest or most suitable option for you on the market.

Sometimes reality is complex, financial support is lacking, and there is no choice but to use a loan to get through your degree. However, a sharp distinction must be made between a targeted loan intended to bridge a temporary, defined cash-flow gap and a loan intended to finance a permanent shortfall in your day-to-day financial management.

If you are in a constant monthly deficit in which you are short 2,000 ₪ each month to cover expenses, taking a loan of 20,000 ₪ does not solve any structural problem; it simply buys you time, postpones the inevitable by a few months, and adds a monthly repayment plus interestThe "price of money" – the amount paid for the use of someone else’s money, as income to the depositor or as a cost to the borrower. to your existing debt.

Before digitally signing for a loan, answer the following questions:

1. What exactly is this money for?
2. What is the exact minimum amount we need?
3. What is the real interest rate and the total cost of the loan (total repayment)?
4. Exactly when do we begin repaying the money (is there a grace period during the degree)?
5. What exactly will be the source of your repayments?

The installment-payment trap

Splitting credit-card payments into installments can be useful for a large, unusual, one-time expense (such as an urgent repair or buying a computer for studies). The financial disaster begins when students start paying for their day-to-day lives in installments: supermarket purchases in 3 installments, clothes in 4 installments, and going out to a pub in installments.

In this situation, even before the new calendar month has begun, a substantial part of your limited future income is already "taken" and pledged to debts and charges from previous months.

National Insurance contributions are among the financial expenses students most often forget, often leading to accumulated debts that carry penalties and indexation owed to the state.

A higher-education student who does not work at all is legally required (as of 2026) to pay a fixed minimum monthly amount of 171 NIS for National Insurance and health insurance contributions. For details on the contribution amount and payment method on the National Insurance website.

When you work as an employee, the contributions are handled through your payslip. Part is deducted from your salary, and the employer pays its share as well—so there is no need to separately pay the minimum contribution for a non-working student. Even part-time work can provide you not only with income, but also save you the separate National Insurance paymentThe periodic payment made to the insurance company..

Very important: make sure your status is accurately updated in the National Insurance systems, especially during transitions when you start a new job or stop working ahead of an exam period. The critical mistake is not the monthly amount itself, but completely ignoring the issue for an entire year, only to discover an onerous debt notice in your mailbox.

Many students in the workforce tend to move frequently between temporary jobs, change employers, or work two small jobs simultaneously to fit around their courses. Do not assume in advance that the employer's calculations or payroll software are always correct and accurate just because the payslip looks like a complicated technical document.

Set aside 5 minutes each month to check your payslip:

• Make sure all the work hours and shifts you actually worked were recorded in full.
• Check that you were paid travel expenses as required by law, overtime, or recuperation pay (if you are eligible).
• Make sure that legally required contributions to PensionA monthly payment made to a person after retirement from work in order to help maintain their standard of living. and Pitzuyim (פיצויים) are made for you according to your eligibility. If you came to the job with an existing active pension fundA savings vehicle based on mutual risk sharing that includes insurance coverage in cases of disability or death. from a previous employer, this is hugely important for maintaining your pension continuity and bringing forward the start date of contributions.
• Tax coordination: if you work at two jobs simultaneously (for example, as a teaching assistant at a university and working shifts at a bar on weekends), you must complete tax coordination on the Tax Authority website. Without tax coordination, the second employer will have to deduct the maximum tax, amounting to tens of percent of your salary.

Many will tell you that during your studies, the goal is merely to "survive" and that saving is impossible. In practice, even a very small standing order of 100 NIS, 200 NIS, or 300 NIS a month to a savings plan or Kupat Gemel LeHashkaa (קופת גמל להשקעה)A flexible savings vehicle that allows withdrawal at any time, or receipt of a tax-exempt pension after age 60. can work wonders. At this stage of life, the exact amount is less critical—the key is building the psychological habit of regular saving. Time has immense power (Compound interestA situation in which the returns accumulated on an investment are reinvested and generate additional returns themselves, creating accelerated growth of the money over time.) in long-term savings.

However, you must not save money blindly and at any cost. If you insist on depositing 200 NIS per month into a low-ReturnThe profit (or loss) from an investment over a certain period, usually expressed as a percentage of the original amount invested. savings plan while you are constantly overdrawn at the bank or have an expensive loan on which you pay high monthly Interest—you are not saving; you are losing money every month.

The right financial order of operations:

1. Paying off expensive debts: eliminate your bank overdraft, pay off short-term loans, or settle credit-card debts.
2. Building a safety cushion: set aside a small liquid amount (for example, the equivalent of one to two months' expenses) intended solely for unexpected emergencies (urgent dental care, computer repair, sudden relocation).
3. Saving and investing: only after the first two items have been addressed should you begin directing available funds to long-term savings or capital-market investments.

If you can start early—excellent. Time has great power in long-term savings. But savings should help you build stability, not cause you to take credit to make it through the month.

This tip may not help you get through the current exam period, but it is critical for what comes next.

Graduates of academic degrees who completed their studies from 2023 onward may be entitled to a significant tax benefit (income-tax credit points), starting in the tax year following the year in which they completed their studies:

• For a bachelor's degree: one tax credit point (1) for up to 3 years.
• For a master's degree: half (0.5) a tax credit point for up to two years.

Eligibility and its scope are subject to Tax Authority rules and the standard duration of studies.

This benefit is worth thousands of NIS in net annual pay that will remain in your salary. Remember: this benefit is not automatically updated on your payslip! You must proactively claim and use it by completing Form 101 with your employer at the beginning of the year, or by submitting a direct request for tax coordination / a tax refund to the Tax Authority office.

1. National Insurance — contribution amount for students — up-to-date information on payments for students who do not work.
2. National Public Transport Authority — information for students — information on student profiles and public transportation discounts.
3. Kol Zchut — arnona discount for low-income earners — an explanation of possible eligibility, the income test, and treatment of shared apartments.
4. Tax Authority — tax benefit for academic degree graduates — information on tax credit points and how to claim the benefit after completing studies.
5. Kol Zchut — mandatory pension insurance and maintaining continuity of rights — useful information for students who work and change workplaces.