STUDENT FINANCE

No. Eligible students have their tuition fees are covered in full via the student loan.

The maintenance loan contributes to a student’s living costs.

The maximum maintenance loan any student can get to study in England is currently £10,544. It’s lower if the student lives at home (max £8,877). This is for a course with standard course length; longer course loans are available for courses of greater duration, such as some Healthcare courses.

Of this figure, about 45% is guaranteed to all students (£4,915). The other 55% is dependent on household income. The lower the household income, the more loan the student is eligible for.  

Any students with p/t (or f/t during holidays) jobs, do not have term-time income counted in the assessment of their student funding.

The student finance calculator is a great place to start, which doesn’t take long to fill in and gives you an estimate of how much loan a student will be entitled to: https://www.gov.uk/student-finance-calculator 

Potentially. If the household income is very high, parents are expected to cover the shortfall in the loan amount.

For instance, let’s say a student is eligible for £5,000 per year of maintenance loan, and a student is looking at a halls of residence that’s £120 per week with bills included, on a 43-week contract.

That means the loan amount doesn’t cover the student’s rent and bills, which means they’ll need money from somewhere to cover any course costs, travel, social life, groceries, and whatever else they require. Parents should research what loan their children are entitled to, and budget accordingly.  

Students get their maintenance loan in three instalments, at the start of every term – end of September, start of January and around Easter. Halls of residence usually ensure rent payments coincides with the loans coming in.

As you can see, your child may be in a position where up to £3,000 could land in their account in one go. That can be simultaneously exciting and daunting for a student.

The students who budget best keep a record of sorts. When a loan comes in, students need to work out their priorities, and it’s a balancing act.

Here are some examples of such ‘balancing’.

1. Jack chooses catered accommodation, and he gets breakfast and evening meal every weekday, meaning their grocery bill only needs to cover lunches and weekends. He pays more for accommodation.
   
   
2. Michael chooses self-catered accommodation, which is cheaper, but their grocery bill will also be higher.
   
   
3. Lucy chooses cheaper accommodation, with shared bathroom facilities and a laundrette, which costs £7 to wash and dry a load of laundry.
   
   
4. Sam chooses more expensive accommodation, but has their own bathroom, and a washing machine and dryer which is included in the accommodation cost.
   
   
5. Stephen chooses accommodation outside of the city located above a supermarket, so doesn’t need to travel to buy food. He gets the Metro service onto the University campus.
   
   
6. Misha chooses accommodation on-campus so has no travel costs, but shops more often at the pricier ‘local’ smaller supermarket.
   
   
7. Jo lives at home with their parents and contributes £100 a month to the bills. They drive a round trip of 30 minutes a day to the Coach Lane campus, so have pay to run this vehicle. Jo has more disposable income.
   
   
8. Kylie lives in a large, upmarket halls of residence, located next to restaurants, bars, supermarkets. It’s expensive and her parents support her to pay her rent. Included in her rent are bills, internet, en-suite bathroom, a gym, washing machine, dryer and dishwasher in her flat, as well as spaces in the halls for socialising, plus a gym. She has less disposable income but doesn’t pay for her laundry or for a gym membership.

Martin Lewis also talks well on this subject: https://www.moneysavingexpert.com/students/student-budgeting-planner/

Student loan debt is not a regular debt.

For a start, it doesn’t affect your credit score, like a credit card debt would, so it doesn’t affect you child’s chances of say, getting a mortgage.

There is an interest rate, but the amount your child repays depends on how much they are earning. Currently, a graduating student (one on the student Loan Repayment Plan 5) will be paying 9% whatever they earn over £25,000. It’s much like the income tax band. If a student is earning less than that figure, they’re not repaying their student loan.

At present, a student on an annual salary of £30,000 (about £2,500 p/m before tax and NI), will be paying back about £25 per month. It’s even taken directly from your salary so there’s no need to actively pay it.

Martin Lewis’ student mythbusting page is a great resource too: https://www.moneysavingexpert.com/students/student-loans-tuition-fees-changes/

There are two main types: bursaries and scholarships. In the majority of cases, these are non-repayable, so worth looking into.

Scholarships mainly come in two areas: academic, and sport. If your child is very strong in either of these fields, make sure you research if they’re eligible to apply for a scholarship.

Bursaries can be provided by government, such as from the NHS for courses in Healthcare. More commonly though, they can be provided by Universities. These can be given to support students who fit certain criteria, such as students coming from a low household income.

Grants are also available, such as Disabled Students’ Allowance and Adult Dependant’s Grant.