Can I afford to go to university in 2012?
Tripling fees doesn't always mean tripling your costs ●
In 2012 all institutions will be allowed to charge up to £6,000 Many will charge up to £9,000 providing they make extra provisions for bursaries for poorer students
You don't need cash to go to university Tuition fees will be paid automatically for you â—?
No repayments until April after graduation â—?
Earn under £21,000 and never repay Repaid through the income tax system
Repay 9% of everything you earn annually above £21,000 ●
£21,000 threshold rises in line with average earnings ●
30 year cut off for repayments Pay no more after 30 years have passed
Regardless of what you still owe
Above inflation interest will be charged During study - RPI +3%
Earning less than £21,000 - RPI + inflation
Earning between £21,000 and £41,000 – interest rate gradually rises from RPI + inflation, up to maximum of RPI +3% ●
Earn over £41,000 – RPI +3%
Repayments £540 a year lower than now Current – 9% of earnings over £15,000
New – threshold £21,000, meaning lower repayments ●
The following table will help to illustrate this ●
You will owe for longer, and may pay a lot more Cost is spread over much longer period
Initially graduates have more in their pocket ●
Though later it's likely you'll have less as you'll still be repaying ●
Part time students Fees of up to £4,750 (6,750 with bursaries) ●
No longer need to pay up front – eligible for SLC loans ●
No Maintenance Loans/grants
Criteria: first degree, studying 25%+ of full-time course ●
Monthly repayments the same Repay the same each month, whether £6,000 or £9,000 tuition fees & whether you take out the full maintenance loan or not ●
Important implications to how much you'll repay in total ●
Loans also cover living costs Students can also take out maintenance loans ●
Pay for living costs – food, books, accommodation, travel ●
Usually 3 termly installments straight to your bank account ●
How much? Amount of maintenance loan is assessed by your household income (“means-tested”) and whether you decide to live at home or away from home ●
All students are guaranteed up to 65% of total available ●
The remaining 35% is means tested
Maintenance grants If the household income is below £25,000, the student gets the full grant of £3,250 ●
Between £25,000 and £42,600, the grant is on a sliding scale ●
Grants do not have to be paid back
Student loans DO NOT go on credit files Loan, credit card and mortgage providers only know you have a student loan if they choose to ask â—?
Impact on ability to get a mortgage in the future is limited â—?
You may not be allowed to repay early â—?
May be penalised for repaying your student loan back early, especially as real interest is now being charged
Many people will never pay it all back It is estimated only 40% will ever pay back the full amount and these will only be the very top earners â—?
Likely many will repay the same on a 6,000 course as a 9,000 â—?
Think of it like a tax not a loan Why? ●
Repaid through the income tax system
Only repay if you earn over a certain amount
Amount repaid increases with earnings
Does not go on credit files
Debt collectors will not chase it
Bigger borrowing doesn't increase repayments
Many will repay for the majority of their working lives 18
Financial support available (The following may be available as well as a maintenance grant)
Fee waiver – a reduction of tuition fees Bursary – cash/gift in kind (grant/scholarship/living costs) Scholarship – like bursary, often depends on academic ability 19
Useful links www.studentfinance2012.com www.studentfinance-yourfuture.direct.gov.uk www.moneysavingexpert.com/students2012 21