Student finance
You've probably heard a lot about the increases in tution fees and the changes to student finance for students starting university in September 2012.
Fees are rising but not all universities will be charging the full £9,000. There's also help to pay for living costs and some of this will be available as grants that you don't have to pay back.
However, with all the different loans and grants available trying to work out how much you'll actually get and what you'll pay back can be difficult. To make it simpler we've broken down the cost of going to university into three parts:
- Paying for tution fees
- Paying for living costs while you're at university
- How much you'll repay after university
Once you've considered these issues you should have a good idea how much going to university will actually cost you.
Martin Lewis from the Independent Taskforce on Student Finance Information explains the new student finance system
Paying for tution fees
Universities can charge up to £9,000 for new students starting in 2012/13 however not all universities will charge this much. Each university will list it's tution fees on their website. You do not have to pay any money for fees up front or while you are studying. The full cost of fees is covered by a tuition fees loan which doesn't have to be repaid until you are earning over £21,000 a year.
Living costs
While you're studying you'll be able to get money to cover living costs, things like a place to stay while at university, books, food, clothes, phone and other related costs. There are three main types of funding you can get to help with living costs:
- Loans
- Grants
- Scholarships
- Bursaries
How much you'll actually get will depend on your personal circumstances, for example how much your parents earn.
Loans
Loans to cover living costs (also called Maintenance Loans) of up to £5,500 per year are available. The amount of loan you will receive depends on your household income. The lower your household income the more loan you'll receive. Also, where you are studying will effect how much money you can apply for (students in London can apply for more money). You can see the different amounts of loan you could get on the Directgov Student Loans page.
Grants
Full time students can apply for a Maintenance Grant which doesn’t have to be paid back. The grant is for living costs and can be up to £3,250. The amount of grant you will receive depends on your household's income. Students from low income families (up to £25,000) will get the full grant. Students with a higher household income will get less than this and students from households with an income over £42,600 won't receive any grant.
If you receive a Maintenance Grant, the amount of Maintenance Loan you can get may be reduced.
You can see exactly how much grant you could receive and how this would effect your Maintenance Loan by using Directgov's personalised estimator.
Scholarships
If your household's income is less than £25,000 a year you could get reduced fees, free years or help with living costs through the new National Scholarship Programme. Each university will offer it's own scheme so you'll need to check with your own university to see what they're offering. Look up your university's offer on the National Scholarship Programme's A- Z.
Bursaries
Most universities offer their own bursaries and scholarships, the amount available and the criteria you need to meet will be set by individual universities. Not everyone will be able to get a bursary so check universities' websites to find out how much you could get.
Or find more information on bursaries at Directgov: Bursaries, scholarships and awards
Repaying your loans
If you start your course in 2012 you won’t have to start repaying your loan until April 2016 - a few months after leaving university, and only if you are earning more than £21,000 per year. Then you will pay 9% of any earnings above £21,000 until your loan is cleared. If you have a Tuition Fees Loan this will be combined with your Maintenance Loan so you only have to make one repayment a month, which is taken directly from your wages.
Under this repayment system some people will never pay off the whole of their loan, and it is cancelled completely after 30 years. Having to pay a student loan in later life would not affect your credit rating when applying for a mortgage, for example, because it is not included in calculations for these things in the way a commercial loan would.
Interest on Student Loans
Student loans are not the same as commercial loans – interest is calculated differently. The amount of interest you pay is based on your earnings:
While you are studying you'll pay interest at the rate of inflation +3%.
After you finish studying and if you are earning less than £21,000 you'll pay interest at the rate of inflation.
After you finish studying and if you are earning between £21,000 - £41,000 you'll pay interest at the rate of inflation and depending on how much you earn up to the rate of inflation +3%.
After you finish studying and if you are earning over £41,000 you'll pay interest at the rate of inflation +3%.
Calculating your repayments
Use the Student finance calculator to work out your repayments.
Applying for financial support
The quickest and easiest way to apply for financial support is online. All applications are dealt with by Student Finance England. You can register and apply online on the Directgov website from early 2012.
If you're applying for a scholarship or bursary, contact your university or college to find out how to apply. Some universities and colleges look after their own bursaries and scholarships and some are handled by Student Finance England.
The first stage in this process is to fill out your main student finance application. You'll be asked if Student Finance England can share your information with your university or college. This will allow them to calculate how much of the bursary you're entitled to.
