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Student Finance Explained

Student finance is handled by different authorities depending on where you live, it does not matter which country your university choices are in, your finances are handled by the authority in the country you’re from.

Tuition Fee Loan

University tuition fees are currently up to £9250 a year in the UK! The good news is you don’t need to pay any of it upfront and regardless of household income everyone is eligible for a tuition fee loan. This is paid directly to your university in three instalments each year so you don’t have to worry about keeping up with payments.

Maintenance Loan

Paying for accommodation, books and food is expensive so Student Finance offers students a maintenance loan to cover rent and the cost of living such as food and socialising. The size of the loan is dependent on your household income, as it is assumed that your parents will help support you throughout university. The loan amount also varies depending on if you’ll be living at home or at university, and if you’re living in London where the cost of living is higher. The maintenance loan is paid directly to your bank account in three instalments throughout the year.

How is it calculated?

Student Finance assumes that your parents will be contributing towards your university experience so take into account how much your household earns. When completing your Student Finance application you will be asked if you would like to apply for a maintenance loan, if you choose to, you will have to supply information about your current living arrangements. Based on this information student finance will contact your parents/partner to ask them to submit their income information. Student Finance will then assess your situation and let you know how much you are eligible for.

If parental support is not an option as you’re estranged from parents or live in care you can still get a loan. You’ll be classed as an independent applicant and the assessment depends on your income rather than your parents. Charities such as Stand Alone can provide you with information and help during the application process.

Unfortunately your maintenance loan doesn't always cover your costs, if that's the case there's lots of additional support available to you.

Maintenance Grant

A maintenance grant is a non-repayable grant given to students to help with living costs depending on their household income. You can apply for a maintenance grant and a maintenance loan. Unfortunately this is not available for English students from Student Finance England or Student Awards Agency Scotland, but is available for students from Northern Ireland, and Wales.

Student Loan Repayments

The word loan often scares people into thinking they’ll be in debt, with their credit scores impacted, having to immediately pay back the lump sum the second you graduate. Your student loans will not impact your credit score, and repayments only start once you’re earning above a threshold. Contrary to the popular belief you can’t move abroad to get out of paying your student loan, but it is written off 30 years after the April you were first due to make payments.

Just like taxes, the more money you earn, the higher your monthly repayments are. The amount is automatically deducted from your paycheck before tax so you don’t have to worry about keeping up with payments. Whilst student loans are completely free to take out, there is interest added which will be included in the amount you repay.

There are two different types of repayment plans, which depends on when you started your course, and if you’re a Scottish or Northern Irish student (Plan 1) or an English or Welsh student (Plan 2). Each plan has a repayment threshold, and you only start paying back the loan when you earn over that threshold. You will have to pay 9% on the amount you earn OVER the threshold. Find out more about repayments here.

Posted in Advice, Student Life, UCAS & Application on Jan 27, 2021 by

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