As we all know, going to university can offer a fantastic opportunity for our futures and for growth as a person. However, such an opportunity does not come without a cost in the UK, unless you are Scottish and attending a Scottish university. So how do you fund such an expensive experience? If you are starting your undergraduate degree in September or October 2018, the fees you will be paying will be up to £9,250 per year (27,750 in total for the three years). This price is just for the fees and you also need to take into account living costs and accommodation – meaning that a student loan is pretty much essential to be able to afford to attend a University. In this guide, we are going to look at how the student loan works and break it down for the sake of clarity.

Different types of student loan

student-loan As part of the larger student loan, there are two parts. First, you have the maintenance loan which is given to you to help you pay for your living costs, rent, food, socialising and so on. If you choose to live at home when attending university, you will receive slightly less as you will not need to pay rent. The second part is the actual University Fee loan. This, you will not see at all as it will be transferred directly to your university from student finance. You will have to start paying this back the April after your course finishes, depending on how much you earn. To pay it back, you will need to be earning more than £25,000 a year – this was previously £21,000 per year. You will pay back 9% of everything you earn above the £25,000 threshold each year.

When should I apply by?

what-happens-bankrupt If you live in England and are looking to fund your place for the start of term in September or October, the deadline for applying for a student loan was May 25th. If you are Welsh then the deadline was May 11th and if you are a Northern Irish student, it was back in April on the 13th. In Scotland, students-to-be have until the 30th of June. Before you despair that you have missed the deadline and not got your application done in time, you can still apply for your loans now. The only difference is that your loan will be given to you up to nine months after your course start date. This means you may have to find another way to fund the first couple of months of your degree, perhaps a part time job or a loan.

How much can I borrow?

credit-check The amount you can borrow from Student Finance varies depending on a number of factors. It depends on where you are loving, with those attending university in London receiving more money due to the higher cost of living. It is also based off your family’s household income. As mentioned, there are two parts to the loan; the maintenance loan and the university fees. The maximum a student can borrow for their maintenance loan is £8,700 if they live away from home. For a student living in London in the same capacity, you can get a loan up to £11,354. If you live at home whilst studying, the maximum you will be able to borrow is £7,324. Keep in mind that the maintenance loan is means tested, therefore you may not get the maximum loan if, for example, your family are high earners. Family’s which have a household income of £62,215 or above can only borrow £4,054. For your tuition fees, the amount you can borrow is up to £9,250 in England, £9,000 a year in Wales and £4,160 in Northern Ireland. If you are Scottish, you will not have to pay a fee at all. Please be aware that these fees do not count towards your course materials, so things like books, equipment and stationery will have to be funded by you or your maintenance loan.

What about a maintenance grant?

In the past, there used to be a maintenance grant which was given to students who came from poorer backgrounds. Instead of receiving the money and having to pay it back, it is essentially gifted to them to make sure that everyone can afford to go to university. However, this has now been revoked. The maintenance grant was scrapped in 2016 by the conservative government, raising concerns for students from a lower income background wanting to attend university. The new ruling could be seen as a deterrence for lower income student-hopefuls. Nevertheless, you are now able to borrow more now than you could before the grant was scrapped. Therefore, the amount of money you will receive will not change but you will have to pay it back now, depending on your earnings.    

Daniel is a loans expert based in London and has been working in the payday loans industry since 2010.