Free money! …well sorta
Getting started with Student Finance
Tuition Fee Loan
The Tuition Fee Loan is directly paid to your university or college and covers your tuition fee each year. The maximum tuition fees that universities can charge for entry this year (2013-2014) is £9,000 for students from England.
Maintenance Loans
Maintenance Loans are intended to help you with living costs, and are available to all full-time students under the age of 60 (or 50 in Scotland). The loan is paid to you in three installments: one at the start of each university term.
The maximum yearly Maintenance Loan available for students starting university in 2012/13 is:
£4,735 if you’re living at home.
£5,500 if you’re living away from home but outside London.
£7,675 if you’re living away from home in London.
This will be slightly less in your final year as they do not cover the summer months.
The Maintenance Loan…it’s in two parts!
- The first part is guaranteed, no matter how much your parents earn, you will get it!
In England and Wales 72% of the Maintenance Loan is guaranteed, although in Scotland it is significantly less (if you’re from Scotland and have a household income of over £61,000 a year, you will only receive the minimum loan of £915 a year).
- The second part however is decided according to your household income, this is what your parents earn.
Getting the full maintenance loan – To receive the full Maintenance Loan, your parents’ income must fall under a certain level (around £50,000 in England, £40,000 in Wales and £20,000 in Scotland).
The sliding scale- If your parents income is higher than this, then the second part of the loan decreases. If your household income is above £57,708 in England, £61,000 in Scotland, £50,000 in Wales and £56,000 in Northern Ireland then you will receive NOTHING on top of the first part.
How to apply for student loans
New student? – Visit the Directgov website to register for an account to apply for student finance.
Household income – When applying you may need proof of household income and/or your identity. (This will be sent by post.)
The form – To complete the process you will be sent a loan declaration form. You must sign and return this in order to confirm that you’re happy with the loans you’re applying for.
Deadlines – The deadline for students planning to start university in 2012 will be announced shortly.
From Wales? Student Finance Wales
From Scotland? SAAS
From Northern Ireland? Student Finance NI
Returning students – If you’re a returning student then login here with the Customer Reference Number you were provided with when you first registered.
If your household income was assessed when you applied last year, you will need to fill in a short online application form.
However, if your household income wasn’t assessed last year, your application should be processed automatically. Log into your student finance account just to check your details are all still correct.
All returning students will then receive a finance entitlement letter and declaration form, which they must sign and return.
How much student loan should I take?
Take it all – Even if you don’t need it all, you can put anything you don’t need into a high interest savings account. These accounts pay more interest than the loan coasts, so by just holding onto the money you’ll be making a profit!
Saving – Storing extra money in a high interest savings account will also mean you have a little flow of cash for life’s emergencies!
Don’t go wild – If you know you likely to go on a wild shopping spree once you get your loan consider paying your rent upfront termly, at least that way you’ll know you have somewhere to live!
Interest rates on student loans
A student loan will accrue interest from the date it’s paid out until the date it’s paid back in full.
From 1 September 2012 until 31 August 2013, the interest rate for ICR loans taken out in 2012 will be 6.6% (RPI, plus 3%).
For more information see SLC’s website.
Repayment of student loans
You only start paying your Tuition Fee Loan and Maintenance Loan back when you’re earning over a certain amount each year.
When will I start repaying?
http://www.slc.co.uk/services/loan-repayment/how-repayment-works.aspx
Should I pay back more of my student loan than I have to?
I VERY MUCH DOUBT IT!
As a student loan has a low interest rate charged on it, you won’t necessarily be saving money by paying it back more quickly than you have to.
Don’t pay back more of your student loan than you have to if;
- You are borrowing any other money at a higher interest rate. Always pay these off first as these cost you the most!
- You are debt free and a saver. By putting your money into a high interest savings account or ISA you’ll be making more money than you would be saving by paying it back.
- You are likely to need a loan in the future. Remember any commercial loan (e.g. car, home improvements etc.) will have a higher interest rate than your student loan. So you’re better off keeping that cash stashed in a high interest savings account until you need it!