Getting your head around student finance

What is student finance?

When you’re at university you will need money to live on. Rent, bills, travel and food all add up and therefore students apply for student finance. Student finance is basically a loan you can apply for to help you with living costs whilst you are at university. The difference in funding for UK undergraduate and postgraduate students is very different and I will try to explain both types of funding in this post.

Funding for international students varies a lot, so I won’t be going into that type of funding in this post.

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What could you be eligible for?

Undergraduate:

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Postgraduate:

Financing a postgraduate course is more difficult as tuition fees are not covered. However, from September 2016 postgraduate students will be able to apply for loans, hooray! The loans are up to £10,000 for the duration of a postgraduate course and do not take household income into account. Therefore, these loans can be used to help out with tuition fees and living costs.

More information can be found here.

When do you need to apply?

Undergraduate:

Technically, you can still apply for student loans up to 9 months into your course. However, in order to have your money for the start of your course you should aim to have applied at least 3 months before your course begins.

Postgraduate:

Currently I’m not sure, as the loan has only been announced very recently. It will be likely that applications will open closer to the summer. Keep up to date here.

What happened with the grants?

You may have seen in the news in the last few months that delightful Mr Cameron has removed student grants completely and replaced these with loans (pardon the sarcasm). Basically what this means for any new student is that you will no longer get any money that you do not have to pay back. Previously, students from households with low incomes would get a mix of a loan that they had to pay back and a grant that they didn’t. This is no longer the case and now you are only entitled to a loan. However, even if in the old system you would have been entitled to a grant, you won’t be getting less money to live on now, it’s just that all of it will be a loan and you will need to pay it back.

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How do I pay it back? 

Undergraduate:

For students who started their course after September 2012 you will pay back your student loan after you begin to earn £21,000 or more per year. You will pay 9% of anything you earn over the threshold. Therefore, if you are paid monthly and earn £1,750 before tax per month, you would repay 9% of the difference between what you earn and what the threshold is:

  • £1,750 – £1,444 = £30
  • 9% of £306 = £27

So your student loan repayment would be £27 a month.

More information can be found here.

Postgraduate:

The new postgraduate loans are to be repaid similarly to undergraduate loans. Repayments are to be made on an income-contingent basis, at a rate of 6% on income above £21,000 per year. This is lower than the initial percentage of 9%. The interest rates are to be set at RPI+3%.

Will it cover my rent/bills etc?

Not necessarily. It is important to check how much your university accommodation will cost and start planning out how much university will cost for you. Generally, most students survive on their student loan and perhaps a part time job. If it wasn’t feasible students wouldn’t come to university, however this doesn’t mean it will be easy. I think it’s a great idea to use the student finance calculator to double check how much money you are entitled to. Then, I would create a spreadsheet of all the money you will  be spending a month on rent, bills, travel, food, going out, clothes, toiletries etc. to see if you would manage on this loan.

Important things to note:

Undergraduate loans are for a maximum 4 years (unless you have acceptable extenuating circumstances). Therefore, if like me you drop out of one university and start a new university the year after, you have to be careful. You will not be funded for more than 4 years, thus you need to work hard to ensure that you don’t have to repeat a year, as you won’t have the funding to do this.

NHS courses:

NHS courses are funded very differently to standard ones.

If you’re studying medicine, dentistry, nursing or a healthcare course in England, you may be eligible for an annual payment from the NHS to help with your study and living costs – generally known as a bursary. You won’t have to pay this NHS bursary back.

Along with the bursary you also can apply for:

  • A £1,000 grant from the NHS
  • A reduced Maintenance Loan from Student Finance England

You can use this calculator to work out how much you could be entitled to

The best part (in my opinion) of this is that if you’re eligible for an NHS bursary, then the NHS also pays your tuition fees. These tuition fees are paid directly to the university so you don’t even need to worry about them. Make sure to keep an eye on this, to make sure you are aware of any changes.

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Where can I find out more?

https://www.gov.uk/student-finance/overview

https://www.gov.uk/apply-for-student-finance

 

Where to log in

https://www.gov.uk/student-finance-register-login

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