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Brief Guide to Student Finance |
| Student finance | ||||||||||||||||||||||||||||
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A university education in the UK should provide you with some of the best years of your life. Here you may enjoy a new sense of independence within a relaxed but structured environment; the new-found freedoms of living away from home for the first time; and the opportunity to explore new avenues of study and leisure pursuits, to forge life-long friendships with like-minded people, and generally to have a lot of fun - as well as, of course, to acquire a valuable degree in Higher Education.
But university education is not free, and there are some scary tales around - tales of graduates leaving university to start their careers with debts of £20,000 or so. It needn't be like this, provided that you
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| The costs of student life | ||||||||||||||||||||||||||||
Basically, these can be divided into two main blocks:
These are the fees charged by the university to attend your chosen course. Considerable changes are taking place in university funding as a result of the Labour government's controversial introduction of so-called 'top-up' fees. This rather opaque term simply refers to the new system of tuition fees: firstly, their increased rate, and secondly how you pay them. As from September 2006, all new students face higher tuition fees; but (in contrast to the previous system) they won't have to pay any tuition fees until after they have graduated. In other words, they pay more, but they pay later (see loans, below). Or as the government puts it: 'Study first, pay back when you're earning.' No university is allowed to charge more than £3000 per year for tuition at present - but most universities have set their rates at this maximum level. This applies to the academic year of 2006/7; the fee may be permitted to increase in line with inflation in coming years. | ||||||||||||||||||||||||||||
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2. LIVING EXPENSES
You will need to do your own calculations here, as the circumstances of every student will vary. Some will live in university accommodation on campus (and costs for this vary considerably); others will live at home. Some will drink prodigious quantities of beer; others none. Some will need a constantly updated wardrobe; others won't even use a wardrobe. Here are some guidelines and suggested figures for a year's spending:
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£3000 for fees + £7000 for living expenses = £10,000 per year. (Note that this will be considered by many to be a somewhat conservative estimate.)
Don't panic! If you don't have private means, or wealthy and generous parents, you can cover much of this cost by a mixture government-provided loans and grants. Start the process as soon as you apply for a course by contacting your Local Authority (formerly Local Education Authority, or LEA). See the website, listed below, of the Department for Education and Skills (DfES). And certainly make sure you meet the deadline for applications, otherwise your first instalment will be delayed until well after the start of your first term. | ||||||||||||||||||||||||||||
| Government student loans | ||||||||||||||||||||||||||||
Loans are divided into two categories:
Separate government loans for living expenses are also available to all eligible students, but they probably won't cover all your expenses. For 2006/7, the maximum loan for living costs has been set at £4405 per year (£6170 for students of London universities; £3415 for students living at home). The limit of the loans available to you is scaled according to your 'household income' - which, in most cases, means what your parents earn; the limit is also keyed to the grant that you might also receive (see below). Such maintenance loans are paid directly into a student's bank account. Thus, all told, you could borrow more than £7000 per year (for tuition fees and living expenses) from the government. The terms are seductive: the interest rate is the same as the official inflation rate (currently about 3% per cent per annum) - far lower that the usual high-street rates. And you don't have to pay back a thing until after you have graduated and you begin earning more than £15,000. Then you have to start paying back your debt at the rate of 9% p.a. on all income in excess of the £15,000. Repayments are deducted directly from your income through PAYE. So do the sums. If you've borrowed (say) £20,000 in your student days, and you manage to earn a salary of £20,000 after graduation, you'll be paying off your loan at £37.50 per month. In other words, at that rate it would take you about 50 years to pay it off in full. However, the government has promised that, if you have failed to pay off all your student loan after 25 years, the outstanding debt will simply be cancelled. The government-owned Student Loans Company (SLC) is responsible for handing out loans, and applications are assessed by a branch of the SLC called Student Finance Direct, in conjunction with the Local Authorities (see the websites below). | ||||||||||||||||||||||||||||
| Maintenance grants | ||||||||||||||||||||||||||||
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There is further government help at hand to offset living costs. This comes in the form of grants, and the big advantage here is that, unlike loans, you don't have to pay anything back. The trouble is that they are means-tested, and awarded according to your household income. So, for 2006/7, if your household income is less that £17,500 p.a., you can receive a maintenance grant of £2700 p.a. (the maximum available). If the household income is between £17,500 and £37,425, you can receive a 'partial grant', according to a sliding scale. So a household income of £26,500, should produce a grant of about £1500. No grants are available if the household income is higher than £37,425.
In addition, if you receive a grant, a limit is placed on how much you can borrow for your maintenance loan. The table for 2006/7 might look like this (in round figures; note that personal circumstances differ - such as the number of dependant children in your family - and such matters affect the award):
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All these figures are likely to shift upwards in future to adjust to inflation.
Extra help is available to students with disabilities, or who have dependants to look after. Grants are paid in three instalments, at the beginning of each term (as are the student loans). | ||||||||||||||||||||||||||||
| Bursaries and scholarships | ||||||||||||||||||||||||||||
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Most universities have their own schemes for supporting students in need of extra funding. These are usually in the form of non-repayable bursaries, scaled according to household income. Have a look at the website of your chosen university, to see what is on offer. Also, scholarships in many forms are available to students rich and poor.
Students pursuing courses related to the National Heath Service (NHS) are entitled to a special set of bursaries. | ||||||||||||||||||||||||||||
| Bank loans | ||||||||||||||||||||||||||||
| You can also borrow more money from the banks, of course. Because they are very keen to sign up students for a lifetime as loyal customers, banks offer various attractive inducements, including interest-free overdraft facilities, attractive loan rates and free gifts. Shop around for the best deal, and think of the long term (such as what happens to that free overdraft after you graduate). | ||||||||||||||||||||||||||||
| Scottish universities | ||||||||||||||||||||||||||||
| The details above apply to universities in England, Northern Ireland and Wales (although some variations in tuition fees, and grants for tuition fees, apply in Wales). Scotland has a somewhat different system, which falls under the control of the Scottish Executive (Scottish Government), and is administered by the Students Awards Agency for Scotland (SAAS). The most important point to note is that the Scottish Executive has decided to make Scottish Universities free to all residents of Scotland; or rather, the Scottish Executive pays their tuition fees. These are in any case set at the lower rate of £1700 p.a. (but £2700 for courses in medicine). However, on graduation many Scottish students have to pay the Scottish Graduate Endowment (currently set at £2216), which can be payable through a loan. UK students from outside Scotland can receive loans to pay Scottish tuition fees in the usual way. | ||||||||||||||||||||||||||||
| Useful websites | ||||||||||||||||||||||||||||
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Information about open days: www.opendays.co.uk
Department for Education and Skills: www.dfes.gov.uk/studentsupport Higher Education & Research Opportunities: www.hero.ac.uk Student Loans Company: www.slc.co.uk Student Finance Direct (entitlements to government funding): studentfinance.direct.gov.uk Scotland: Students Awards Agency for Scotland: www.student-support-saas.gov.uk Wales: www.studentfinancewales.co.uk National Union of Students: www.nusonline.co.uk | ||||||||||||||||||||||||||||
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