As September gets closer, the season for college and university-goers is almost here. But, before your new start begins, it’s important to make sure you know everything about student loans, so you can start budgeting for your college or university experience. That’s why Angel Advance has put together this straight-forward guide to help you prepare.
What is a Student Loan?
A student loan is a borrowing of money from the government to help new college or university students pay for tuition fees and general, day-to-day living costs.
You may be eligible for extra money on top of this depending on your personal circumstances, for example, if you have low household income, whether you have a disability or whether you have children.
Types of Student Loans
There are two types of student loans – tuition fee loans and maintenance loans.
Tuition Fee Loans
A tuition fee loan is charged by colleges and universities to pay for the important parts of your course and academic life, as well as the main services students may use for their wellbeing and campus experience.
According to UCAS (the Universities and Colleges Admissions Service), tuition fees normally cover:
- Lectures, seminars and tutorials.
- Course admin costs.
- Access to course-related facilities and equipment (e.g. laboratories, studios, etc.).
- Access to campus libraries and computer rooms.
- Support services for students.
- Student union membership.
- Field trips essential for the completion of your course (travel and accommodation only).
- Graduation ceremony.
For more information on tuition fee loans, click here.
Maintenance Loans
A maintenance loan is funding from the government to help new students with daily essential costs, such as rent or food, while studying at college or university.
For more information on maintenance loans and living costs for full-time students, click here.
How Do Student Loans Work?
The two types of student loans, tuition fee loans and maintenance loans, work slightly differently.
How Do Tuition Fee Loans Work?
Your university or college sets the amount needed for your tuition fee, this is usually £9,250 for full-time UK students. However, if you are studying an accelerated degree course, the amount can be set at up to £11,100.
This fee is paid directly to the university and you must pay it back.
How Do Maintenance Loans Work?
The amount of funding you receive from your maintenance loan depends on your household income and the date that your college or university course starts. The maximum amount you can get depends on where you live.
The loan is paid directly into your bank account at the start of each term and you must pay it back.
How Does Student Loan Repayment Work?
When you start repaying your loan and how much you pay depends on which repayment plan you are on. For more information on repayment plans, click here.
For example, if you started your course on or after 1st August 2023, you are on Plan 5 and you will not have to start repaying until your income is over £25,000 a year.
Depending on which plan you are on, you will be charged a different amount of interest. The circumstances will also be different if you:
- Have more than one job.
- Are self-employed.
- Are on more than one plan type.
- Your income changes during the year.
If you’re employed, your repayments will be taken out of your account at the same time as tax and National Insurance – your payslips should show how much has come out.
Even if you leave your course early, you will still need to repay your tuition and/or maintenance loans back. This does not include grants and bursaries. If you receive more money than the type of student finance you are entitled to, you will also have to repay these overpayments.
Who Can Get A Student Loan?
Eligibility criteria for a student loan depends on:
- Your college or university.
- The level of your course.
- Whether you have studied a higher education course before.
- Your age.
- Your nationality or residency status (you may be able to get student finance even if you’re not from the UK).
For more information on who can get a student loan, click here.
How Do I Apply For A Student Loan?
If you are from, or normally live in England, you can apply to Student Finance England online. All you have to do is:
- Set up an account.
- Complete the application form.
- Give details of your household income (your parent or partner will be asked to confirm this).
- Send proof of identity if needed.
If you cannot apply online, you can use the form finder to get the forms you need or call Student Finance England.
For more information on how to make a student loan application, click here.
Student Debt Advice
The cost of living crisis, along with spending money on a limited income while studying, can mean unaffordable debts such as overdrafts and store cards. If you’re facing money worries over your debts, get free confidential debt advice today. Contact us to speak to one of our professionals who can help you decide on the best debt solution for you.
If all you need is some debt advice, there is no need to worry – there is no risk to getting debt advice, as this won’t affect your credit score. Our team is available any time, day or night, to help you in any way we can.
If you’d prefer to go online, our easy-to-use, online tool can also help you weigh up the debt solutions available to you and give you the best recommendations for your unique situation on-screen, instantly.
