Student Loans UK
Many students in the UK are getting student loans to help them with the financial costs involved with their further education. A number of these students also decide to move to a different city and therefore incur the additional costs such as rent and food, which might be covered if they were living at home. It is important to acknowledge that the main student loan provider in the United Kingdom only lends money to people who are from the United Kingdom or “settled” here.
UK student loans are what is known as “Income Contingent”, another word for means-tested. This basically involves looking at the ‘entire’ financial situation of the student. For example, if they live with both of their parents, then their parents incomes will be assessed to determine how much money the loans company is willing to lend to that particular student.
It is very important to check that the course and University that you want to attend enables you to be eligible for a student loan. It may come as a surprise that, although most Universities and course enable you to be eligible, enrolling on certain courses at a few Universities will mean that you are not eligible. Additionally, different options will be available to you depending on whether you are a full-time student or a part-time student.
The differences between a student loan and a bank loan
There are several differences between a student loan (from the Government) and other types of loans such as bank loans:
- Firstly, a student loan is only available to people studying in further education, and is not available to the general public. The student loans company will require confirmation of your enrolment on the course from your university.
- Secondly, the rate of interest on a student loan is much lower than it is on any other type of loan.
- Thirdly, most other types of loans will require regular repayment, regardless of your situation. A student loan is different because you only start to repay when you are earning more than the threshold (£15,000 for those who started University between 1998 and 2011, £21,000 for those starting after 2012).
What other types of student loan are available?
The main student loan for full-time students covers tuition fees and ‘maintenance’ i.e. living costs, so that should cover you for most things. However, depending on your income and individual situation, you may also be subject to bursaries and other grants that do not have to be paid back. Normally maintenance loans and maintenance grants are only available for full-time students. Some of these will be paid through the Students Loans company whereas others will be paid by your University.
When are the fees increasing and how much will they be?
The fees are increasing for any student who starts a course from September 2012 onwards. Current fees for Universities in England are around £3,000 or just over, but many of them will be increasing to £9,000 from September 2012. It is important to note that full-time students can still get a loan to cover the full cost of their tuition fees.