Student finance explained for 2012 entry
Yes, fees are rising, but you will have access to an excellent financial support package – and will only repay your student loans in manageable amounts after you graduate
With the new finance arrangements for 2012 splashed all over the media it is understandable that you may be confused. In fact, you will be able to borrow the cost of your tuition fees and money to cover your living expenses – and repay them after you graduate, in manageable amounts related to your income. So don’t let these concerns put you off going to university. Additionally, there will be lots of ‘free’ money available if you are from a low or even middle income household.
Tuition fees: how much – and how do I pay?
From 2012, universities will be able to charge between £6,000 and £9,000, as long as they meet strict criteria to ensure that all students can access their courses, regardless of family income. The majority of universities have announced that they’ll charge £9,000, but check their websites for full details. The good news is that you do not have to pay your fees upfront. Instead, you can take out a Tuition Fee Loan from Student Finance England, who pay the fees direct to your university. The loan is available to all eligible home students, on part- and full-time degree programmes, irrespective of their family’s income.
Living costs: how will I survive?
Obviously you’ll need money for accommodation, food, books, socialising, communications (smartphone, plus apps), and so on. Where will this money come from? Your lottery-win dreams are unlikely to come true, so for most students this will mean taking out a Student Loan for Maintenance, again from Student Finance England, to cover their living costs. Eligible students are entitled to at least 65 per cent of the maximum amounts available; the other 35 per cent depends on household income.
The maximum loan available will vary depending on where you live and study. If you move away from home to study in London, the maximum will be £7,675. For a student living away from home outside London it will be £5,500, and for students living at home it will be £4,375. The loan will be paid into your bank account in termly instalments to help you budget: don’t spend it all in freshers’ week on clothes/socialising/a car!
How will I repay the loans?
Your fee and maintenance loans will be combined and you will start paying them back through the tax system from the April after you graduate, BUT, only if you are earning over £21,000. The most important point is that your monthly repayments will be linked to how much you earn, not the amount you actually owe: you’ll repay at a rate of 9 per cent of your income above £21,000. For example, if you are earning £25,000 you will pay back approximately £30 a month. If for any reason your income drops below £21,000, your repayments will stop. Any debt left after 30 years will be written off. The interest rate is linked to the Retail Price Index (RPI), plus extra depending on your graduate income. The maximum interest rate, which will apply once you are earning over £41,000 a year, will be RPI plus 3 per cent.
Maintenance Grant (non-repayable)
If your family’s household income is £25,000 or less, you’ll be entitled to a non-repayable Maintenance Grant of up to £3,250; students from households with incomes of up to £42,600 will be entitled to a partial Maintenance Grant. Your family income will be assessed before you go to university. Like the maintenance loan, any grant you get will be paid termly. (However, your maintenance loan will be reduced by 50p for every £1 of grant you receive.)
Bursaries (non-repayable)
Universities charging between £6,000 and £9,000 have to agree to provide financial support to help students from low income backgrounds. You need to check universities’ websites to find out what they are offering; their access agreements with the Office for Fair Access (OFFA) still have to be formally approved, but, as an illustration, Queen Mary, University of London, plans to offer a generous bursary package: £1,500 a year for students in receipt of the full Maintenance Grant and £1,200 for students who get a partial Maintenance Grant.
National Scholarship Programme
The Government has announced a £150m National Scholarships Programme for students from lower income families. Again, check with individual universities to see how they will administer this. For example, Queen Mary plans to offer 266 students from low income families a £3,000 benefit in their first year: a £1,500 fee reduction plus £1,500 made up of a cash bursary and ‘in-kind’ support. In their second and third years, they’ll receive the Queen Mary Bursary.
Scholarships (non-repayable)
Many universities also offer scholarships, although information on these can be hard to find. They usually reward academic achievement, for example, excellent results in your year 13 exams, or, once you are at university, your first year exam results. To find out more, contact university finance advisers, usually located in welfare or student support offices. They can advise you on all aspects of financial support to study, including how to actually obtain what you are entitled to.
Important note 1: these arrangements refer to students living in England and studying for an eligible course at an English university, and who qualify as home students.
Important note 2: some of this information might change before you start university so keep up to date at: www.direct.gov.uk/studentfinance and/or www.bis.gov/studentfinance
