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AdviceFreshersUni Life

Student Finance Guide 2020

Quick Facts

  • Student Finance is a government funded loan system to allow students to go to university.
  • Universities here in the UK can charge up to £9,250 per year in tuition fees.
  • The finance available includes loans to cover course fees and your living costs.
  • You won’t need to worry about any university costs before you start, student finance looks after this and pays your way before term times begin.
  • Maintenance loans are means tested. This means your parents may be expected to help support some of your living costs.
  • Student Finance is a loan, but is to be paid back once you graduate and start earning above a certain amount. Don’t let this put you off, consider it more like a tax based on your earnings at work. It’s a manageable way to repay what you borrowed.
  • Be aware that the student loans do charge interest of up to 6.3% each year until you pay it all back.
  • Interestingly, loans can be written off before you manage to pay it all back. If you’re not earning a huge amount once you graduate, or you don’t manage to pay everything off after 30 years, your debts are wiped clean.
  • In general Student Finance is for UK students, but do look into things as there might be some circumstances that make you eligible for support.
  • If you don’t qualify for funding with Student Finance, you might get some support from bursaries, scholarships, charities, or corporate sponsorships.
  • Watch a Student Finance England introduction video

Student Finance Myths

You don’t need the Money in Advance to pay for University

You don’t have to pay before you go to uni. Once you have had your application approved and processed, tuition fees are automatically paid for by the Student Loans Company. Aside from this your living costs are covered by a Maintenance Loan.

You don’t have to take these loans, and you can pay the tuition fees directly.

Please also bare in mind some students won’t get the same support as the majority.

After 30 years, any remaining debt is wiped

You stop owing the Student Loans Company either when you’ve cleared the debt, or when 30 years have passed (starting from the first April after your graduate), whichever comes first.

Yep, that’s right, if you never get a job which earns over the threshold, it means you won’t have to pay back a penny.

What happens on death or incapacity? Your student debt will be wiped in both of these circumstances.

There are no debt collectors with student loans

All student loans are repaid through the payroll just like an income tax. So when you start working after you graduate, your employer will deduct the repayments from your salary, before you even see the money. 

The amount you receive in your bank account each month already has the student loan repayment removed. So no, this means there are no debt collectors chasing you for money, as you don’t have a choice to repay as it is paid off automatically.

Student Loans do not go on credit files

When you apply for a credit card, loan or a mortgage, to evaluate whether you’re able to make the repayments lenders look at three pieces of valuable information: your application details, any previous dealings they’ve had with you, and crucially the information on your credit reference files and your rating.

Most financial transactions and credit relationships are listed on these files. Student Loans however are not (with the exception of students who started university before 1998).

So the only way these lenders will know if you’ve got a student loan is if they ask for this info on application forms. They have the right to, but in general they’ll only be interested if its for high value transactions such as mortgages.

All About Student Finance

What is Student Finance

Student Finance is a system of support which includes a mix of loans and grants.

Student Loans are the repayable funding which covers Tuition Fees and Maintenance costs.

Grants can be applied for to help cover your costs, and don’t have to be paid back.

It’s important to note that if you finish your course early, you might have to repay some of your grants and funding, so it’s important to get the best advice before taking any actions along these lines.

How Much does University or College Cost

Most universities charge £9,250 a year for full time undergraduate course tuition fees. Some universities charge less, but sadly expect to fork out a lot, and any less is a bonus.

If you live in Scotland, Northern Ireland, or Wales, different maximum fee limits may apply, and your nation’s student finance agency may cover a portion or the whole cost of your tuition. Check out the details below.

International students should always expect to pay much higher fees.

For those who think it might be a struggle don’t worry too much. Most students can apply for Student Finance scholarships or fee waivers to help cover your costs.

Students from, or going to, Scottish, Welsh, and Northern Irish Universities may have different rules

Students from England, Scotland, Wales, and Northern Island could have different tuition fees. The same applies to those looking to move to any of those countries. Financial support comes comes from your home country, and it’s that government who decides how they support their students, at home or abroad.



Scotland

Scottish students studying in Scotland pay no tuition fees. English and Northern Irish students studying there will be charged up to £9,250 per year, as will Scottish students studying in England, Wales and Northern Ireland.

For more info head on over to: Student Awards Agency for Scotland (https://www.saas.gov.uk/

Wales

Tuition fees at Welsh Unis are £9,000 per year for those studying in Wales. For those from Wales look to study in the rest of the UK, fees are £9,250.

For more info head on over to: Student Finance Wales (https://www.studentfinancewales.co.uk/)

Northern Ireland

Northern Irish students studying in Northern Ireland can pay up to £4,160, while those from the rest of the UK studying there will be looking at a £9,250 fee per year.

For more info head on over to: Student Finance Northern Island (https://www.studentfinanceni.co.uk/)

How much Student Finance can you Receive?

The Tuition Fees Loan gives you the exact amount needed to cover your course fees in full. This is normally up to £9,250 a year, or up to £6,000 per year with private universities.

Maintenance Loans will cover your living costs, however you will receive an amount dependent on your home household income and where you are going to live during your studies. The maximum amount you can apply for is £8,700 a year, with a little extra if you’re studying in London or abroad. Please be aware that many students will get less than the max, so it’s worth heading over to a Student Finance Calculator (https://www.gov.uk/student-finance-calculator) and doing the maths to make sure you’ll be okay!

Who can get Student Finance

There are a whole host of different criteria about who can receive student finance, but quite simply if this is your first degree at a registered university, you should be eligible for some sort of support for your costs of tuition and living.

Rules vary for part time students, those with special circumstances, over 60s, of students at private universities.

You also need to be a UK citizen, or have lived in the country for at least 3 years before you start your course. EU students can apply for loans to cover their course fees, but sadly often miss out in maintenance loans.

Do I qualify for Student Finance? Check here for more info (https://www.gov.uk/student-finance/who-qualifies)

Other costs as a Student

Tuition fees are painful. Paying 9 grand for a series of lectures you struggle to attend due to hangovers from hell.

Costs aside from this mount up to an average of around £800 per month, while London students should expect to budget around £1,000. Costs to consider include your accomodation, food, transport, social life, uni books and supplies.

When do I need to consider Student Finance?

Applications can be made the spring time before your course starts, and we do recommend applying as soon as you can. We’ve heard many nightmare stories of students receiving their student loan payments through weeks late, half way through their term. Speaking from experience, that baked bean life gets old pretty quick, so do your future self a solid and get yourself set up as soon as you can.

Give yourself enough time to get the info sorted, and a month or so to hear back whether the Student Finance have approved your application.

Note you’ll need to reapply for funding each year, but once youve done your first year, the following are simpler applications.

Double check your Student Finance deadlines here (https://www.gov.uk/apply-for-student-finance/when)

Where to turn if you aren’t eligible for Student Finance

Universities offer various scholarships, bursaries, fee waivers, and hardship funds (for emergency cases). Selected charities, companies, councils and professional organisations also award grants and financial support. 

If you aren’t eligible, or you choose not to receive Student Finance at all, please make sure your salary, savings, or other finance is enough to cover all of your costs during your full time at university.

Will my tuition fees go up or down?

Tuition fees have grown over the years, with some students even being slapped higher fees than they signed up for. Heavy news. But if you take out a Student Loan to cover your tuition fees, any issues will be covered and won’t hurt your future finances.

Student Debt

As soon as you graduate it’s a sigh of relief. Many years of study, done. You’re in the real world. But with that graduation certificate also comes at a cost. The reality is you will likely owe many thousands.

Your student debt is repaid through the payroll in your job just like an income tax. So when you start working after you graduate, your employer will deduct the repayments from your salary, before you even see the money. The amount you receive in your bank account each month will already have the student loan repayment removed.

How much does University cost?

We can’t lie, going to university is crazy expensive. Stories of your parents going to uni for free make it all the more painful! You’ll likely graduate with a huge debt, and nothing left to do but go on a gap year and pretend it doesn’t exist.

But don’t worry, most of your costs are covered by Student Finance, and you don’t need to front the money before you start.

Check what funds you’re eligible to receive using a Student Finance Calculator (https://www.gov.uk/student-finance-calculator)

The table below outlines the maximum public universities can charge you every year in undergraduate tuition fees, depending on where you live and when you apply. (JONNY CAN YOU INPUT THE TABLE UNDER “TUITION FEES IN THE UK” at this link: https://www.savethestudent.org/student-finance/the-big-fat-guide-to-student-finance-2012.html ) 

This is the upper limit of what universities can charge for tuition, and most universities will stick close to this. However if you’re lucky your costs may come in less than this, depending on your uni or your course.

Fees are often different, and sadly more pricey if you’re an overseas student coming to the UK to study. If you’re a UK student considering a year abroad, the fees again may vary.

It’s worth double checking your university’s course details or the UCAS course catalogue for a full run down of the costs (https://digital.ucas.com/search

Course Costs

While course fees are a pricey investment, it sadly doesn’t stop there. These are different at every uni, so it’s worth confirming with them before hand, but you’ll likely have to budget for additional costs of buying books, stationary, printing, and excursions.

Living Costs

Uni students need to remember living costs when pencilling out their costs. Think about rent for the roof over your head, utility bills, transport to and from uni and the pub, social life, and food.

Your maintenance loans, grants and bursaries will cover some of your living costs. It’s worth checking out what you’re entitled to before you enroll (https://www.gov.uk/student-finance-calculator). You’ll likely need some extra pocket money, so check out our Best Ways to Earn Money as a Student (LINK TO ARTICLE I WROTE THE OTHER WEEK)

It’s important to note, that if you are studying a course via distance learning, in most cases you won’t qualify for a maintenance.

How to pay for University

Paying your Tuition Fees

Full and Part Time students have the opportunity to take out a Tuition Fee Loan that covers the full cost of their course fees. It doesn’t matter where you study within the UK, your full course fees will be covered.

Please note that if you don’t take a Tuition Fee Loan, you will have to make your own arrangements to pay for your tuition either in full or in instalments.

In Scotland, even though tuition is ‘free’ you will still need to apply for Student Finance to clarify that you won’t get charged.

Part Time Students can expect fees of between £4,500 and a max of £6,935. Since 2012 for the first time, part time students studying at least 25% of a full time course are eligible for tuition fee loans on exactly the same basis as full time students.

Postgraduate Students applying for their first Master’s Degree can apply for a Master’s Loan from the Student Loans Company to pay for their courses. SImilarly to undergrad loans, these only need repaying if you earn enough once the course ends. Those applying for a Doctoral Qualification are eligible to apply for a Doctoral Loan. Again, like above it only needs to be repaid if you earn above the threshold.

Paying your Living Costs

Living costs include all other day to day costs at uni that aren’t paying for your tuition. This includes as accomodation, food, transport, social life, uni books and supplies.

A maintenance loan is designed to cover these costs. Although everyone can apply for one of these loans, they are means tested, and the amount you can receive depends on your household income, or how much your parents earn back at home.

The higher your household income, the less funding you can apply for. Be nice to mum and dad as they’ll probably be helping you out big time.

Check out the maximum maintenance loan values you can borrow and more info on everything here ( https://www.practitioners.slc.co.uk/products/full-time-undergraduate-education/full-time-maintenance-loan/whats-available/ )

Maintenance Grant

Grants make us happy, like real happy. They’re funding to help you through uni, but are wildly different to loans as you don’t have to pay the money back!

For those in Scotland, the Young Student’s Bursary grants up to £1,875 a year.

In Wales get a minimum of £1,000 each year. The upper value of grants for Welsh students is insane, up to a max of £8,100, and even more if you study in London! 

In Northern Ireland, you can receive up to £3,745.

For students in England we have drawn the short straw! Maintenance Grant’s don’t exist for those starting uni in England any more. You’re expected to take out a larger Maintenance Loan instead. Devastated.

Social Support Grant

In Wales and Northern Ireland, those coming from a less well-off background may have the opportunity to swap a Maintenance Grant for a Special Support Grant (SSG). There are a handful of different criteria, so it’s worth checking out this great opportunity.

The SSG in Northern Ireland pay out up to £3,475 every year, and in Wales up to £5,161. Similar to a Maintenance Grant, it’s means tested and you never have to pay it back.

Bursaries and Scholarships

Almost all universities offer prospective students a number of bursaries and scholarships. These cash gifts to help you during your time at uni, and usually you don’t have to repay them. 

Bursaries often go to students with smaller household incomes, those students leaving care, or those you who pay or care for others.

Scholarships reward talents or achievements in studies, sports, or music. Some unis also offer incentives to student particular courses.

Check out this video from Which? to help you out in finding some ( https://www.youtube.com/watch?v=zyvVwVf30dQ )

Your Own Money

It doesn’t matter how good you are with your money at uni, you’ll always run your bank account dry. Any additional funds are always a big help.

Check out our best ways to make money as a student (LINK TO ARTICLE) for plenty of ideas on taking yourself from rags to riches.

The Bank of Mum & Dad

A lot of your maintenance funding is means tested. So the amount you receive depends on your parents income. The more they earn, the less funding you receive from the government, and your parents are expected to help you out.

This puts you in the sticky situation where you sometimes have to beg your mum and dad for a bit of moolah. It’s pretty awk but you shouldn’t avoid it. Whether they let you borrow the money, or give it to you out of the kindness of their heart, you’ll be glad you asked them for help.

Borrow Your Money

We recommend against borrowing money for uni, especially if it’s a last minute dash for cash. Plan your ideas, and compare options, costs, and repayment terms. Whether it’s a credit card, loan, overdrafts, there are serious consequences that can be a thorn in your side for years after uni, so take your time.

If you have to resort to borrowing, an interest free overdraft is a pretty good choice. Banks let you borrow a little extra cash for free. But make sure you don’t get stung by going over your limit as the charges are super painful.

How to Budget

Work out your monthly income: all maintenance loans, grants, wages, help from home, and any savings you can spread throughout the year.

Figure out all your monthly costs as a student: accomodation, utilities, travel, food, social life, clothes etc.

Comparing the totals of each and see where you stand. If you’re coming up short, figure out a way to make some extra money, or shrink your spending habits. It’s not the most fun thing to do, but it really is worth it in the long run.

Extra Sources of Funding

Support for Parents or Carers

If you are somebody’s carer you could be eligible for some help during your time at university. The options below support students with £1,000’s every single year, and you don’t even need to worry about paying this source of cash back!

Parent’s Learning Allowance awards cash to students with dependent children.

Childcare Grant helps pay for any sort of childcare fees. In Scotland this pot of funding is limited so apply early to make sure you receive all the help you can.

Adult Dependants’ Grant provides funding support if you are financially responsible for another adult.

For more details on who can claim and how much is available, get in touch with Student Finance for a full run down of all the up to date information.

Disabled Students Allowance (DSA)

If you have a disability that will bring you additional costs in your time at university, you might be eligible for a Disabled Students Allowance or DSA.

This is a support for disabilities of a physical or a mental status, and can also apply if you have learning difficulties. For a full run down on the ins and outs of DSA click here ( https://www.gov.uk/disabled-students-allowances-dsas )

Please note, that accepting other disability related grants or support can affect your opportunities for receiving DSA so have a good talk with your student finance team and your university before you sign up to any commitments.

Other Funding

There are so many opportunities for funding it really is easy to miss out on cash help at uni. Speak to your uni, or scour Google about Student Finance opportunities.

If you are studying for a healthcare related degree, you could be eligible for an NHS Bursary ( https://www.nhsbsa.nhs.uk/nhs-bursary-students )

There are Travel grants available for students hoping to study part of their course abroad, or are medical or dental students with placements in the UK.

If you are already working, and considering to take time out to study, speak to your employer and they might consider some form of sponsorship. You are normally expected to work for them after your studies, to pay them back on their investment into your studies. But the rewards for your opportunity to head back to uni are pretty fruitful so don’t let this put you off.

For those with special circumstances, you never know, you might be eligible for benefits. Click here for a benefits calculator (https://www.stepchange.org/how-we-help/benefits-calculator.aspx)

Try out the Turn2Us grant checker ( https://grants-search.turn2us.org.uk/ ) which scours a database for a whole host of charity options for funding.

There are bursaries and scholarships beyond those dished out by your uni, all with their own weird and wonderful titles, so don’t be afraid to hunt them down.

Emergency Money

If while your at uni, and you literally run out of all cash, there are potential opportunities for emergency cash. Speak to your university or students union about Hardship Funds. This is a last resort, but could be your only choice, and the help is there to keep on your feet.

Each uni has their own criteria and will consider each case individually, depending on your Student Finance details and your budget plans.

Repaying your Student Loan

You only start paying your Student Loan the April after you have finished your degree. However, you only make payments if you earn above a certain salary.

Plan 1 loans will start being repaid once you earn over the annual threshold of £18,395 a year, £1,533 a month or £354 a week.

Plan 2 loan repayments start once you earn over the annual threshold of £25,725 a year, £2,144 a month or £495 a week.

You might have both Plan 1 and Plan 2 repayments to make, depending on when you started your studies.

If you never earn more than the above salaries you won’t make repayments. This includes if your salary drops or you become unemployed. If this happens, your repayments stop until you’re back over the threshold.

You will be making monthly repayments, as long as you earn above the threshold values, for around 30 years, until either you pay back everything you borrowed or the loan is cancelled.

For all the info on repaying your student loan, check out the Student Finance website (  http://media.slc.co.uk/repayment/qsg/index.html )

Repayments are Taken from your Wages

Repayments are taken from your wages by your employers payroll team before you even get paid. So you don’t need to worry about budgeting and paying bills on time. How much you have repaid each month will be outlined on your pay slip, next to your Tax, National Insurance, and Pensio contributions.

If you’re self employed, you will make repayments at the same time as your income tax payments once a year on your tax return.

How Much Will I Pay?

You should expect to pay 9% on any money you earn above the threshold amount. This means your monthly repayments will be pretty managable.

So if your income threshold is £25,725 and you earn £26,725 yearly salary, you will pay 9% of the £1,000 above the threshold, which is £90. This is paid in 12 monthly installments, so the monthly contributions would be £7.50.

Your Student Loan is Written Off After 30 Years

If you still haven’t paid back the full amount after 30 years, your debts get written off! Any remaining balance is wiped off your record, and you can relax, and enjoy one less bill.

This means many students won’t actually pay back the full amount of the loan! Not bad hey.

Your loan is also wiped clean if you die. Happy days, kinda.

Student Loan Small Print

Student Loan Charges Interest

Just like any other loan, the Student Loan adds interest onto your total owable amount. However some say this is the cheapest loan you’ll ever get the chance to borrow. The interest rate of a Student Loan is linked to the economy’s performance and can go up or down.

Until 2012 there wasn’t any real cost to taking out a student loan, as the interest rate was set at the rate of inflation (RPI). For everyone who signed up after the changes were made in 2012, interest rates on your loans would be at the rate of RPI inflation plus 3% on the outstanding balance.

The figures are updated September every year, but currently:

In England & Wales, interest varies between 3.3%-6.3% depending on whether you’re still studying or how much you earn. Interest defaults at 6.3% if you don’t keep your details up to date.

In Scotland and Northern Ireland the interest rate is at 1.75%.

Income Includes Everything, Not Just your Salary

The Student Finance Company consider any form of income when judging your repayments. So not only does it include your employment wages, but also any other taxable income, benefits, investments etc. Keep an eye on everything as it could push you into having to pay different amounts when you least expect it.

Repayments Continue Even If You Live Abroad

Moving away from the country, doesn’t mean you can move away from your student debt. While it may change your income threshold, you’ll still need to stay in touch with the Student Finance Company and keep up to date with repayments. Things can get complicatged, so for further info check out the Student Finance Company website (https://www.slc.co.uk/students-and-customers/loan-repayment/completing-a-form-help-and-evidence/living-overseas.aspx

Student Loans Do Not Affect Your Credit Rating

Your credit score is super valuable to you, and lets you get the best deals on credit cards, loans, energy bills, and even mobile phone contracts. Your student loan however, doesn’t come into consideration at all when your credit score is being assessed.

You Need to Keep them Updated

Your Student Finance office wants to know what your up to, and hiding from them is the worst thing you can do. You need to update them about changes to your contact details, income, bank accounts, and also moving abroad, marriages, or if you work for yourself.

Not updating your details may mean missing out on your student funding, or after uni you can be charged with higher interest rates or even penalty fees.

Repaying Early Could Be More Expensive

Some think clearing their debt off early is a weight off their shoulders, and getting rid of growing debts asap is ideal. However you might actually end up paying back more than you would if you let the loan run it’s natural course. Think over it carefully, do your research, and only pay what you can afford to.

Repaying Grants and Loans, Even If You Drop Out

For some students, they realise that the uni life just isn’t for them. Speak to your university advisors and student finance teams, there might be options which could reassure you of your worries, or guide you in the right direction.

Make sure you don’t rush into anything drastic. We’ve been there, done that, got many a t-shirt. It’s stressful. Just make sure you only make a decision when you are full informed of all options.

Bare in mind, if you leave uni early, you will have to pay back your loans, and you might even have to pay back your non-repayable funds like grants and bursaries. It may also block your chances of accessing Student Finance again in the future.

Tips for Shrinking Student Debt

Find Some Extra Pocket Money

Finding work at uni can be a fun way to line your pockets with extra cash. It’ll bolster your LinkedIn with valuable experience points, introduce you to a new friendship group, and give you money for your saturday spends.

Scope out Extra Funding

There are all sorts of additional sources of funding for students. Most presume they won’t receive any, but so many people can, and miss out on these opportunities year after year. Check out our section above on sources of extra funding

Tax Refunds

Most students will end up paying too much income tax.

You’re allowed to earn a little more than £10,000 a year completely tax free! So whether it’s a part time job, placement, or paid internship, and your yearly income you’re likely due a tax refund!

Click here to learn how to claim your tax back, and check if you’re due some free cash! https://www.gov.uk/claim-tax-refund

Avoid Unnessary Borrowing

It’s super easy to get yourself into a whole host of additional debts that might keep you up at night. We recommend trying to stay out of your overdraft, and avoid quick loans and credit cards.

If you miss payments on these sketchy sources of credit the consequences and your debts can spiral out of control pretty quickly.

How to contact Student Finance

For all Student Finance information and advice, find out how much you will receive, contact the finance team of where your uni is located.

Student Finance England

Website ( https://www.gov.uk/student-finance )

Phone: 0300 100 0607

Facebook ( https://www.facebook.com/SFEngland )

Twitter ( https://twitter.com/SF_England )

Student Finance Scotland

Website ( https://saas.gov.uk/ )

Phone: 0300 100 0607

Facebook ( https://www.facebook.com/saasfb/ )

Twitter ( https://twitter.com/saastweet )

Student Finance Wales

Website ( https://www.studentfinancewales.co.uk/ )

Phone: 0300 200 4050

Facebook ( https://www.facebook.com/SFWales )

Twitter ( https://twitter.com/SF_Wales )

Student Finance Northern Island

Website ( https://www.studentfinanceni.co.uk/ )

Phone: 0300 100 0077

Warning! These Terms Aren’t Set In Stone

So now you know everything there is to know on student loans, you might be wondering can any of this change?

Pre University: Specific details and figures are changing all the time, so before you sign up to university or any funding sources, please speak to the relevant teams dealing with your applications first.

After University: The terms of your Student Loan can actually change, even after you have signed your contract. Interest rates will obviously change, but earnings thresholds and even loan wipeout times can change.

It’s impossible to predict when the government will panic and throw everything up in the air, so do your own research, and make sure you always know where you stand.

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