Student Loan

Now that you are at university, started your course and received your student loan you are officially a student! Well done! The next bit is surviving the course, passing with a decent grade and to not get yourself in a heap of debt by graduation day, make sure that you have your student loans explained to you before you start.

We can help you on the financial side with ways on how to deal with your student loan and what to do when you get it.

What is a student loan?

A student loan repayment is having to repay your student loan when you leave to the Student Loan Company (using your student loan login). You’ll also accrue student loan interest as well, so keep an eye on student loan interest rates UK when you're at university.

When you start university, you will be given a student loan, sometimes referred to as a student maintenance loan, which helps you to pay for tuition costs (books, equipment etc) and anything else, such as food.

The average student loan is around £45,000 (though this isn’t the maximum student loan). Usually, over a period of 25 to 30 years, think of it as being like a little mini-mortgage.

You can easily change your course or university details if they change. You can go to your account and change the details to let Student Finance know.

What student loan plan am I on?

The plan that you are on will depend on the amount of money you are earning. The more you earn, the more you pay back. There are 4 loan repayment plans, which are:

Repayment plan	Repayment terms (all before tax and other deductions)
Plan 1	If your income is over £382 a week, £1,657 a month or £19,895 a year.
Plan 2	If your income is over £524 a week, £2,274 a month or £27,295 a year.
Plan 4	If your income is over £480 a week, £2,083 a month or £25,000 a year.
Postgraduate loan	If your income is over £403 a week, £1,750 a month or £21,000 a year.

Student Finance is run by the government and offers students financial aid during their time studying for a degree (they will handle any student loan England enquiries and for anywhere else in the UK). They are separate from your university and UCAS so if you need to contact them about anything or have enquiries you will have to contact.

Student Finance, the company, will also help you to find out when your student loan payment dates are, so make sure you apply for student loan as soon as possible.

The theory will be similar for those looking at postgraduate courses, but overall, you will need to look into the processes available for the student finance postgraduate loan application or for your Masters student loan.

What can you get?

There are tuition fee loans, maintenance grants, student finance maintenance loan (for which you can use a student maintenance loan calculator), special support grants and disabled student allowance.

Extra help?

Childcare Grants, Parents’ Learning Allowance, Adult Dependants’ Grant, Access to Learning Fund, Child Tax Credit, Income Support, National Scholarship Programme, and international students can apply for grants for help with travel are all available for a UK student loan.

Maintenance Loan

This is one of the main and most popular loans that students are eligible for. This can be put towards rent and accommodation and living expenses. It is a lump sum to help with day-to-day and general living costs. Loans are not free money, and you have to pay them back!

Maintenance Grant

This is an extra bit of money to help you get buy while studying and this doesn’t have to be paid back. Grants are susceptible on an income basis; Student Finance will evaluate your application and let you know if you are entitled to the extra help.

Tuition Fees

Student Finance can pay for your tuition fees, and this is mainly for full-time study. Now, degrees can cost up to £9,000 just to attend the course alone. Student Finance will pay the university for you, and then you pay the loan back when you earn enough money.

Applying

You need to register for a student finance online account to go through all of the steps. You can find the forms and fill them out and then send them if the online option isn’t available to you. You may need to provide details of your household income and get other adults to support your application.

What do I need?

When you register you provide your UK passport details on your application, and Student Finance will tell you if you need to send photocopies of your passport, and if you don’t have one then copies of your birth or adoption certificate. Never send your actual documents! In case of losses or damages incurred on the way! You may need to provide your parents or your own P60s which is how much you earn each year.

What do I need to send proof for?

You need to send your own, your parents or your partner’s household income details if you are applying for a full Maintenance Loan, Maintenance Grant, Special Support Grant, Childcare Grant or Adult Dependants’ Grant. This is so Student Finance can evaluate your personal situation and tell you much you are entitled to receive.

You should use a budget calculator – which are available online or make one yourself in a document on a spreadsheet – to see what your outgoings and incomings are.

When will I get a response?

This is usually around 6 weeks after you have applied, there will be a declaration form you will need to sign and send back which is a contract that you are agreeing to. This contract means you accept what Student Finance offers you, and understand the Terms and Conditions of what you need to pay back and how and when.

What if they quote me wrong?

If they quote you wrong, or you think you are entitled to more help call up their advice centre, and they will be able to let you know which forms you may need to fill in, or what to do next.

What if I don’t know what course I am on?

You can apply before having any courses or universities confirmed. Applying early as possible will help to iron out any of the kinks before your course starts. In springtime when you receive offers and have to respond to your university offers, you can attach the exact course and university to your application. Once this is done, your loans are in a better position to get to you as term starts.

What if I go through Clearing or Adjustment?

You can easily change your course or university details if they change. You can go to your account and change the details to let Student Finance know. You should do this as soon as you have any new information to make sure you get the correct amount at the right time.

When will I get my loans?

Student Finance is paid in three instalments, which are at the start of each term, usually within a few days of your first lecture. This means you will have to budget as it will be at least three months before you next lump sum and you need to make sure you have enough money to survive that time!

The Student Finance and loan process can be very confusing, and there can be lots of different types of forms to fill in. If you are feeling overwhelmed or unsure, ask a friend or member of your family to help, someone who has been through it before, or even ring up and speak to an advisor.

Budget

You should use a budget calculator – which are available online or make one yourself in a document on a spreadsheet – to see what your outgoings and incomings are. When you use this budget calculator remember to be realistic, because writing down that you will only spend £10 each week on leisure activities/miscellaneous when you know it will be more like £60 won’t help you when it comes to the end of the month.

When you are entering all of your values and working out how much you spend and where round up the figure or allow some room for you to over. Especially if this is your first time living on your own because you’re not going to know what it is like yet. Be smart, there are always things to spend your money on, but there are also things that you shouldn’t do with your student loan. Student budgeting is one of the smartest moves you will ever make.

Check your balance

Ideally, you should know what you have in your account and how much you can spend when at university, but during Freshers’ week and the hype of student loan week, you might go a little overboard with the spending.

So, by checking your balance every day you can see how much you actually spent the day before, instead of reaching the end of Freshers and then realise that you have no money – trust us, it’s not a good feeling! After Freshers’ set yourself a target of how much you can spend each week, and then check your balance at the end of each week or add up all of the receipts to see if you’re still on track and in the black.

Checking your balance is very important and you need to do it every single day! The more you're on top of your finances, the better! Every student will have issues with finance over the years, even the most prudent of spenders, but you can reduce these financial blunders by just keep an eye on the pursestrings every now and again.

A student loan repayment is having to repay your student loan when you leave to the Student Loan Company (using your student loan login).

Set up direct debits

It is easier to keep an eye on your bills and your credit score if you have direct debits and standing orders. These bills are paid automatically from your bank account, so you don’t have to worry about remembering to pay them on time, or have to call up or visit your bank. Although, it is best to bear in mind that once you have set up these automated bills they will come out of your account, and if you don’t have enough money to pay them you may be charged by your provider and your bank account.

You can check the terms and conditions of your bank account, or cancel a direct debit before it is due if you know you won’t be able to pay it to avoid bank charges. However, cancelling or not paying a bill will reflect on your credit score and depending on what bill it is, it might cost you too. Watch your spending and guarantee you’ll be able to pay your bills each month. If you’re going to do this, make sure you know what the best student bank account for you is. Be aware as well, that there is a difference between student debit cards and student credit cards.

Give yourself a daily spend

It might seem silly, but when you know how much you can spend each day, you can hopefully stop yourself from overspending. If you give yourself a daily spend of £5.00, and that can be for lunch (check out a healthy eating guide, to see if you can kill two birds with one stone and save money AND stay healthy, too) or anything that you want, if you spend over or under you can add it up and adjust it throughout the week.

And if you want to go out at the end of the week with your friends, you can save up your money from previous days to be able to have a good time on Friday! It is easy to say to yourself that you’ll spend less tomorrow, but in real life that doesn’t happen, but if you allow yourself a small amount every day you’ll be able to buy the things you want but just in moderation.

Allocate and divide

Your budget calculator will make this part much, much easier! Allocate specific amounts of money for each part of your finances, such as bills, travel, rent, leisure and food.

Take away the big amounts like rent, travel and shopping, and then you can see how much you have left for yourself. If you want to be extra responsible you could put the money allocated for the next two months into another bank account or to your friends or family to stop yourself from overspending!

Learning how to budget and to act responsibly when it comes to finances it is a difficult thing to master, but if you follow the rules, you’ll be able to stay in the black and survive university.