Hey there
Im a new member myself, but ill add what knowledge i can to help you out.
Firstly being a broke student myself i can empathise about the running costs (mpg, insurance etc) so the 1.3 engine seems like a reasonable choice, although u may find it slightly underpowered for the car..
By the info that you have given it sounds like it is a Mk2 Golf, they were made from A to J reg (correct me if im wrong please anyone!!)
I own a mk2 golf driver H reg 1.6, which has done 162,00 miles and is still going strong, i would suggest that if u can find a car with fsh or some record of maintenance then it would be preferable as although golfs are very sturdy cars they do benefit from having tlc.
Ive done a fair amount of work to my car, as being young (20) i cant afford a mk3 vr6 or ideally a r32
but hey gimme a few years!! Ive added big bumpers and a 3 bar single headlight grille lowered it and obtained some bbs alloys from a gti. There are loads of parts and places and people who can help if you have any probs.
So basically for the money.. ?300? you would do alot better than picking up an equivalent car e.g. a fiesta and probably make your money go further.
Hope this helps you out anyway, and if people want to see pics of my car then give me a shout
Cheers