Managing your student finance

If you’re thinking of heading to university in September 2013, then you, like many other potential undergraduates, will have your personal statement sent off to your top five universities and are now knuckling down to gain those all important UCAS points. 

Well done for getting this far, your personal statement can be daunting but we’re sure you have done a great job and are already preparing yourself for interviews.
However, we’re afraid to say that the complications of leaving home and starting a new independent life have only just started. 
Once you’ve been accepted and you’ve chosen your university, you will need to think about accommodation, living costs, bills, tuition fees… the list goes on.

Here at University Compare we like to make your transition from home life to university as easy as possible, one thing that may confuse you even before you’ve been given your first assignment is your student loan. This is why we have taken it upon ourselves to explain everything you need to know about them: when and how to apply, how to pay your university fees and the myths about loan repayments. 
If you are planning on studying full time or part time, you may be eligible for a tuition fee loan. This covers the cost of the course and is paid directly to your university. 
You may also (depending on your household income) be eligible for a maintenance loan: this goes into your bank account and helps you with accommodation costs, bills and general living expenses.

If you’re a full time student you can expect a tuition fee loan of up to £9000 per year. 
You may also receive a maintenance loan of up to £7675 per year if living away from your parents, and up to £4375 if you decide to stay at home.

Anyone with a household income of less than £42,000 a year is eligible for a grant as well as their tuition fee and maintenance loan. Grants are non repayable and students who fall into this category can expect to receive to £3,354 a year– That’s not a bad bit of free money!

Part-time students will find that their eligibility for a loan is different to full time students, more information and application forms can be found at the Student Finance web site.

The deadline for applications for full time students starting in September 2013 is 31st May 2013. We cannot stress enough how important it is to apply for your loans as early as possible. You do not need a confirmed place at university to apply, just a valid passport or birth/adoption certificate.
Applications can take up to six weeks and if you apply online, you will be sent a declaration form in the post which you will be required to sign and send back. If you are applying for the maintenance grant on top of the loan, they will require proof of your parent or guardians household income, which you will need to send in the post.

Applying for your loan is a lengthy process, there are thousands upon thousands of people who apply every year, this means the Student loans company can get very busy and may not always be available to answer your questions when you need them to. This is why it is important to give yourself plenty of time incase anything does go wrong. You don’t want to spend your fresher’s week sat indoors because you missed the deadline and as a result have to wait until November for your loan to come through.

So that’s how you get the money – now the tricky part, how to pay it back (and its not as scary as you think!)

Luckily for you, both the tuition fee and maintenance loan are not required to be paid back until the course is finished and you are in full time employment, earning over £21,000 a year. Once you are earning over that amount, you will be required to pay 9% of your income over the threshold of £21,000. 
Confused? Don’t be. Here’s an example: 

Once you’ve finished your course, you find a full time job and are earning £25,000 a year. The amount you are earning beyond the threshold of £21,000 is £4,000. 
9% of £4,000 is £360. Therefore you will be expected to pay back just £30 a month. Simple.

It’s also important to remember that monthly repayments are the same, whether the course cost £6,000 or anywhere up to £9,000. The repayment price depends on your yearly income, not the price of the course, so don’t panic that the price of undergraduate courses have gone up – this will have very little effect on you.

Another myth we need to bust is that your student loan is wiped out after thirty years of graduating. 
We are pleased to confirm that this is in fact true. What this means is, if you are earning a decent wage, but still have £14,000 in student loans at the end of thirty years, it will be completely wiped out regardless. Don’t be scared into thinking your student debt will affect your future significantly, student loans do not show up on credit reference agencies and it is very unlikely to impact your ability to get a mortgage. You would be gutted to find out that £7,000 was wiped out when you panic-paid off £5,000 ten years ago. Our advice to you is: don’t pay up early.

Some people will tell you that getting yourself into debt for your degree isn’t worth it, but with official figures over the past decade suggesting that graduates earn £12,000 a year more on average than those without a degree, your student loan is a small price to pay for such comfortable living. The easy repayment method aside, the university experience alone is worth it and we guarantee you wont regret filling in that UCAS application form.