Student Finance

Introduction

Funding changed for 2006/7 entry and beyond. Here is what you and your parents need to know.

This information applies only to students living in England. If you are a student living in Wales you should check out the Welsh Assembly Government website for the latest information, and if you live in Scotland check the Scottish Parliament website.

Funding at university can be divided into two main areas:

• Tuition fees
• Living expenses (student loans for maintenance)

The figures quoted are liable to change, so go to the DfES website for the most up-to-date information. For the complete DfES advice download this booklet (PDF from studentsupportdirect.co.uk).

Student Finance Workshop

Late in the Lent term, or early in the summer term, you will attend a "Student finance workshop" from which you will learn how to budget, the implications of overspending, and will be given a piece of software to help you manage your money.

1. Tuition Fees

From September 2006 no UK full time undergraduate student will have to pay fees before they start university or while they are studying.

Instead you will effectively be taking out a loan to cover the fees which will be paid direct to the university or college. You will repay this loan once you’ve left university and are earning over £15,000.

2. What can a university charge?

From September 2006 universities in England will be allowed to vary the fees they charge new students. Universities will be able to charge between zero and £3,145 per year. Fees will not rise by more than the rate of inflation before 2010 at the earliest. Variable fees will only affect students who start their course in September 2006 or later. Existing students will not be asked to pay variable fees.

Universities will only be allowed to charge more than the ‘standard fee’ of around £1,200 if they have signed up to an Access Agreement with the new Office for Fair Access (OFFA). This agreement will set out the universities proposals for improving access including the action they will take to promote fair access, so that students from all backgrounds are encouraged to apply. Most popular universities have done this.

3. Student Loans for Fees

How much will it cost me to complete my course?

A number of factors come into play when estimating the cost of your higher education.

The cost to you and your family will be dependent upon your course, institution and household income.

Full-time students who will be new entrants to higher education in 2008/09 will be liable for a fee contribution of up to £3,145. However you will be able to apply for a variable fee loan of up to £3,145, depending upon the actual fee charged by your institution.

Student Loans for Maintenance have been increased to help students meet their basic living costs.

All student loans accrue interest which is linked to the rate of inflation in line with the Retail Prices Index.

There are also a number of grants for which you may be eligible to apply.

Grant and loan amounts increase each year in line with inflation, and your eligibility is assessed by your Local Authority on the basis of your income and that of your household.

4. Student Loans For Maintenance

Loans are available to help with your living costs, e.g. course materials, accommodation, food, clothes, travel etc. Interest is charged at the rate of inflation, so the amount you repay will be equal in value to the amount you borrow.

Can I Apply For A Loan?

If you are on a full-time, sandwich or part-time initial teacher training course, you are eligible to apply for a loan. If you have previously studied in Higher Education, your Local Authority will tell you if you are eligible to apply for a loan again. To receive a student loan you must be aged under 60.

How Will My Loan Be Paid?

Your loan is usually paid in three instalments, one at the start of each term, directly into your bank account. Student Finance Direct will issue a payment schedule letter to you which will explain what amounts will be paid and when.

How Much Can I Borrow?

This will depend upon your household income and where you live whilst you study. The amounts you can borrow are shown in the table below. Of this loan entitlement, 75% is non income-assessed, while 25% is income-assessed. This means that a proportion of the loan paid to you will be dependent upon your household income.

Loan Rates 2009/2010

Maximum rates if 2009/2010 is your first year

• Find out your entitlement (studentfinance.direct.gov.uk)

5. Bursaries

Universities and colleges wishing to charge more than £2,700 a year for a course will have to provide additional non-repayable financial support, such as bursaries, to students on these courses who are receiving the full £2,700 Maintenance Grant. This means that students who receive the full maintenance grant and who are on courses charging the maximum fee of £3,000 a year will get at least £300 a year in additional financial support from their university or college, making a total package of non-repayable support of at least £3,000 a year. This may take the form of a Bursary or some other type of financial help. The type and amount of financial help will depend on the university or college concerned.

Some students will get more than this, as many universities and colleges are expected to offer financial help worth more than £300. It will be important to speak to the university or college that you're interested in and find out what it offers. Contact their student advice service for information.

6. Student Loans for maintenance

Student loans to help with living costs are available. They attract a very low rate of interest - at inflation levels. This ensures that the value of the loan that is repaid remains the same in real terms as the amount borrowed. In February 2009, the interest rate was 2%. All eligible students are entitled to 75% of the maximum figure. Whether they can get any or all of the remaining 25% depends on the student's income and that of their household and the amount of maintenance grant they are receiving.

6. Loan Write-Off

For students starting their course in September 2006 or later, the Government will write off student loan balances (except for arrears) which are left unpaid 25 years after their liability to repay commenced, which is the April after the course finished. This will cover both student loans for fees as well as student loans for maintenance.