Student loans
Unless you're filthy rich, further study equals student loans. Here's how to access that all-important cash - and (the bit we'd like to forget about) how to pay it back.
What do you think about student loans?
Student loans seem great; all that money suddenly appearing in your bank account. What do you do with yours and how do you plan to repay that debt?
"Everyone is entitled to 75% of the maximum maintenance loan."
What is a student loan?
Student loans are government-funded loans, meant to provide you with the cash you need to stay afloat in higher education. For most students this comes in the form of a tuition loan, which covers the cost of your tuition, and a maintenance loan.
Everyone is entitled to 75% of the maximum maintenance loan, and the rest is income and circumstance assessed. For instance, if you are moving away from home to London and your family contribution is below the cut-off point, you'll get the maximum possible loan.
If you really are skint and your parents can make no contribution, you may be able to get a grant for more of your living costs. This is assessed in the same way as a maintenance loan and dished out according to how much you need.
You can also apply for bursaries and scholarships from your university and get extra help if you have dependants, a disability, or a proven learning difficulty.
How do I get a student loan?
Student Loans throughout England, Wales and Ireland come from a company called the Student Loans Company (cleverly) and are most easily applied for online. You can do this through the DirectGov website, where you can fill out an online application form. If you don't have internet readily available, you can get an application form from your local council. You can also print out and fill in the forms.
If you live in Scotland you should apply for your loan through Student Awards Agency for Scotland (SAAS).
When do I apply for my student loan?
It's best to apply a full year before you're hoping to get any money, giving you plenty of time to resolve any problems and make any appeals, but you can apply up to nine months before the start of the academic year.
Student loans, as they are assessed according to your situation, need to be applied for once a year.
What happens if my student loan isn't on time?
The loan (and grant if you're getting it) is split into three chunks which are generally paid by BACS straight into your account on the first day of each term.
The SLC are dealing with a lot of students, a lot of bank accounts and a lot of different amounts of money, so mistakes happen. If your money doesn't go in when it's supposed to, call the Student Loans Company, find out where your money is and when it will be in your account.
Help, I'm going to starve!
Man cannot live on 16p noodles alone. Ask about a hardship grant from your university. There's also a lot your Students' Union can do to help, such as providing small living loans, bus cards, vouchers and so on. Alternatively, it might be time to start begging parents, grandparents and kindly aunts to see if they can lend you something to keep you going.
How do I make the most of my student loan?
When setting up a student account, look at which accounts give you the longest running interest-free overdraft facility. Once you're working, you'll have to pay back the loans, so an interest-free overdraft will give you more time and less pressure to do this.
Budget is a word that fills few people with enthusiasm, but it really is the best way to make sure you can live beyond the first week of term.
Work out exactly what you've got coming in (loan, grant etc), exactly what you've got going out (rent, bills, food) and what's left over. You could even set up another account just for your spare cash.
When do I pay off my loan?
Once you've finished your education and are earning more than £15,000, the loan will be taken off automatically with your tax every month. If you are earning over £15,000 and not receiving loan deduction you will need to inform your payroll department. It's up to you how you choose to go about paying off your loan. The minimum amounts are tiny, but it may well take you a couple of lifetimes to pay the loan off this way. If that doesn't bother you then resign yourself to a nominal amount coming off your pay each month and get on with your life - as this excellent article suggests.
If you would rather pay it off quickly, you can make payments of any size direct to the SLC, which will ensure you pay off more than just the interest every month. The interest on your loan will only ever rise with the rate of inflation, meaning you pay back exactly the value of what you were lent in the first place.
By Christine Backer
What next?
- Visit the SLC website for more information about your loan, or SAAS if you're in Scotland.
- Plan ahead – will you need to get a part-time job, or can you manage on your student loan alone?
- Start budgeting as soon as you get your loan. Work out exactly how much you have to live on each week and stick to it. Use Uniaid's student calculator to help you manage your money.
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