Don’t be put off by the hike in tuition fees!
- Everyone in the UK who is under 60 and doesn’t already have a degree is automatically entitled to a loan to pay tuition fees. All you have to do is apply and the money goes straight to the university without you having to worry about it. You can also receive a maintenance loan to pay for living costs, for which the same rules apply. In addition to this, you can apply for a means tested grant - depending on the income of supporting guardians or personal income - that you won’t have to pay back at all, plus any bursaries that the university offers. The tuitions fees and maintenance loans and grants are all sorted through the same place so it isn’t too complicated.
- If you mean to study in London, you will receive larger loans, grants, and likely bursaries as well, depending on the university, since the cost of living is higher in London. I’ve found that this very easily makes up for it!
- You don’t have to start paying back until you leave university and start earning.
- Under the previous system, we have to start paying back once we start earning over 15,000, but under the new system, it isn’t until you are earning over 22,000.
- You won’t be charged interest on the loan beyond the rate of inflation.
- If you haven’t paid the loans back in 30 years, any remaining debt is wiped.
Martin Lewis, the clever money guy, says to think of this system as more of a graduate tax than a traditional loan:
- It’s repaid through the income tax system
- You only repay it if you earn over a certain amount
- The amount repaid increases with earnings
- It does not go on credit files
- Debt collectors will not chase for it
- Bigger borrowing doesn’t increase repayments
- Many people will continue to repay for the majority of their working life.
So, under the new system, the greater tuition fees will mean that you are likely to be paying back for longer, but the rate of repayment will be slower and easier to manage (and it was fairly slow already).
Here is the clever money guy’s page about student loans for more/better advice. It is very helpful.