Guide to Student Finance
There is a lot of confusion and controversy around Student Finance. But for many people, it's the only thing that enables them to go to uni in the first place. In this blog post, I'm going to discuss some of the main questions around Student Finance, and then you can decide for yourself if it's the right choice for you.
What is it?
Student Finance is a government-run organisation that allows students of any background to attend university. It consists of two separate loans:
Tuition loan - This covers the cost of your tuition fees and goes straight to your university. For most unis, it's up to £9,250 a year, but many universities in Wales, Northern Ireland and Scotland cost less.
Maintenance loan - This is designed to help cover your living costs and will be paid directly into your account at the start of each term. The amount you receive will depend on various things such as how much your parents earn, whether you have a disability or any dependants and if you will be living at home while you study. The maximum you could get is £8,700, but this could be more if you're studying in London or study abroad during your degree. For most people, this won't be enough to cover all your living costs, so your parents may have to chip in if they can. Alternatively, you could get a job to help bring in some extra cash.
There is also a maintenance grant which, unlike the maintenance loan, you won't have to pay back. This is no longer available to students in England, but you can still apply for it if you're going to be studying in Scotland, Wales or Northern Ireland.
Am I eligible?
If you are a UK citizen or have 'settled status' then you are probably eligible for a Student Loan. There are a few exceptions to this, so do make sure to double-check the Student Finance website. Currently, EU citizens are eligible for a tuition loan but not a maintenance loan, but this may change over time.
When will I have to pay it back?
You'll have to start paying back your loan from the April after you've graduated. However, you'll only have to pay it back while you earn over £18,935 in Northern Ireland and Scotland or over £25,725 in England and Wales (this threshold changes if you move abroad depending on where you go). The money will be taken out of your salary before you get paid along with tax and National Insurance, and you'll only pay 9% of what you earn over that threshold. For example, if you're living in England and you're earning £25,825, you'll only pay 9% of the £100 over that threshold. This means that you'd only pay £9 over the course of a year. This will continue either until you pay off your entire loan, or until it is written off, whichever comes first. When your loan is written off depends on where you studied, but it's roughly 30 years after you graduate.
Won't it mean that I leave uni in debt?
In short: not really. Your student loan is unlike a regular loan in many ways. Firstly, it comes out before you pay tax, so you won't see the money leaving your account (unless you're self-employed). Secondly, it won't affect your credit score, so it won't impact your eligibility for things like credit cards and phone contracts. Thirdly, you may never have to pay it all off! Yes, this is money that you owe someone, and you probably pay at least some of it back, but that's pretty much where the similarities between your student loan and a regular loan stop.
How can I apply?
You can apply online through the Student Finance portal. The account you make will be the same one you use to check up on payments and reapply for your loan each year, so keep your password safe!
When is the deadline to apply?
You can apply for Student Finance up to 9 months after you start your course, but the earlier you apply, the better! It can take several weeks to get confirmation of your loan, but the earlier you apply, the quicker it will be. You don't need to have a confirmed place to apply for Student Finance, and applications open in the spring before your course starts.
Hopefully, this will have answered a few of your questions about Student Finance and you'll now be in a much better position to decide if it's the right move for you.