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Student loans: How do they work, what can I borrow and when do I pay it back? Student finance 2024: How do UK student loans work?
(about 2 months later)
The rules are changing for many students who will take out loans to go to university this year. Students hoping to start university in September are being urged to apply for their loans by Friday, to guarantee they have the money by the start of term.
Here's what you need to know. It is possible to apply later, but the Student Loans Company says that could mean delays.
How do student loans work?How do student loans work?
The details depend on where you live in the UK, but student loans are typically made up of two elements: The details depend on where in the UK you live, but student loans are typically made up of:
a loan for tuition feesa loan for tuition fees
a maintenance loan to cover living costs a loan for tuition fees
Most people are entitled to the tuition fee element, which is equal to the annual cost of your course up to £9,250 per year, capped until academic year 2024-25. a maintenance loan for living costs
The maintenance loan is intended to cover accommodation, food, books and any equipment you need. It is means-tested, so the amount you get depends on your family's household income. a maintenance loan for living costs
You might get extra money if you are disabled or have children. Most people are entitled to the tuition fee element, which is equal to the annual cost of your course up to £9,250 per year, external.
If you are under 25 and have no contact with your parents, you might be able to apply as an "estranged student". This means your parents' financial situation is not taken into consideration. The maintenance loan is intended to cover accommodation, food, books and equipment.
Maintenance loans are means-tested, so the amount you get depends on your family's household income. You might get extra money if you are disabled or have children.
If you are under 25 and have no contact with your parents, you might be able to apply as an "estranged student", external. This means your parents' financial situation is not taken into consideration.
Research by the Higher Education Policy Institute, external suggests maintenance loans in England actually cover only about half the cost of living, and less for students in London.
The Student Loans Company says graduates in England leave university with average debts of £44,940.
How much does university cost and does it increase earnings?How much does university cost and does it increase earnings?
How much does university cost and does it increase earnings?
How can I find out how much I can borrow?How can I find out how much I can borrow?
The amount of maintenance help available varies across the UK.The amount of maintenance help available varies across the UK.
Students from England can use the loans calculator on the Student Finance England website This year, students in England will be able to borrow up to £10,227 a year, external for a maintenance loan if living in the UK, outside London and away from their parents. This increases to £13,348 in London.
Students from Wales can go to Student Finance Wales In Scotland, the maximum annual maintenance loan is £9,400, external for under-25s. For students living away from home in the UK outside of London, it is £12,150 in Wales, external and £6,776 in Northern Ireland. , external
Students from Scotland can go to Student Awards Agency Scotland Students from England can use the loans calculator on the Student Finance England, external website
Students from Northern Ireland can go to Student Finance Northern Ireland Students from England can use the loans calculator on the Student Finance England, external website
When and how do I apply? Students from Wales can go to Student Finance Wales, external
It is not too late to apply for student finance if you want to start university this year, even though the official deadlines have passed. Students from Wales can go to Student Finance Wales, external
It means you might receive some or all of your money a bit later. Students from Scotland can go to Student Awards Agency Scotland, external
Students from Scotland can go to Student Awards Agency Scotland, external
Students from Northern Ireland can go to Student Finance Northern Ireland, external
Students from Northern Ireland can go to Student Finance Northern Ireland, external
When and how to apply for student finance in 2024
You can apply for student finance if you want to start university this year.
You do not need a confirmed place at university to apply and, if your plans change, you can cancel or change your application before the start of your course.You do not need a confirmed place at university to apply and, if your plans change, you can cancel or change your application before the start of your course.
The process is different depending on where you live: The Student Loans Company urges prospective students to apply by 17 May to "guarantee their student finance will be in place for the start of the academic year".
The Student Loans Company processes all applications for students in England and Wales However, you can still apply after the first day of the academic year for your course.
Students in Scotland apply through the Students Awards Agency Scotland The application process is different depending on where you live:
Students from Northern Ireland apply through Student Finance Northern Ireland. The Student Loans Company, external processes all applications for students in England and Wales
The Student Loans Company, external processes all applications for students in England and Wales
Students in Scotland apply through the Students Awards Agency Scotland, external
Students in Scotland apply through the Students Awards Agency Scotland, external
Students from Northern Ireland apply through Student Finance Northern Ireland., external
Students from Northern Ireland apply through Student Finance Northern Ireland., external
How do I get the money?How do I get the money?
The tuition fees part is paid directly to your university or education provider.The tuition fees part is paid directly to your university or education provider.
The maintenance loan is paid directly to your bank account. If you applied before the deadline, you should have the money before your course starts. The maintenance loan is paid directly to your bank account in instalments.
These are at the start of each term in England, Wales and Northern Ireland, and monthly in Scotland.
How much interest will I be charged?How much interest will I be charged?
You are charged interest on the loan from the day you take it out, but the amount varies across the UK.You are charged interest on the loan from the day you take it out, but the amount varies across the UK.
It is important to understand that the terms and conditions can change after you have borrowed the money - any interest-rate rises will apply to all student loans not just new applications.It is important to understand that the terms and conditions can change after you have borrowed the money - any interest-rate rises will apply to all student loans not just new applications.
For students starting courses this year in England, the interest rate will normally be set at the retail price index (RPI) measure of inflation. It will be capped at 7.3% from September. Previously, it was RPI plus 3%, with an interest rate cap that has varied over the years. For students starting courses this year in England, the interest rate will normally be set at the retail price index (RPI) measure of inflation, external. It is currently capped at 7.8%., external
For courses in:For courses in:
Wales, the rate is RPI plus 3% - capped at 7.3% from September Wales, the rate is capped at 7.8%, external
Scotland, it is 6% Wales, the rate is capped at 7.8%, external
Northern Ireland, it is 6% Scotland, it is 6.25%, external
Scotland, it is 6.25%, external
Northern Ireland, it is 6.25%, external
Northern Ireland, it is 6.25%, external
The amount graduates pay back will depend on how much they earn.The amount graduates pay back will depend on how much they earn.
What is inflation and why is the cost of living rising?What is inflation and why is the cost of living rising?
What is inflation and why is the cost of living rising?
Q&A: Is there financial support for uni students in Wales?Q&A: Is there financial support for uni students in Wales?
Q&A: Is there financial support for uni students in Wales?
When do I have to start paying back my student loan?When do I have to start paying back my student loan?
You do not have to start repaying your loan until you earn a certain amount of money after graduation. You do not have to start repaying your loan until you earn a certain amount of money after graduation, external.
The threshold for students starting university in England this year will be £25,000.
In Wales it will be £27,295, in Scotland £31,395 and in Northern Ireland £24,990.
You do not repay anything if you earn less than the threshold.
The earliest you will start repaying is the April after you leave your course.The earliest you will start repaying is the April after you leave your course.
Payments are made automatically through the tax system.Payments are made automatically through the tax system.
You generally repay 9% of the amount you earn over the threshold.You generally repay 9% of the amount you earn over the threshold.
However, the amount you can earn before you have to start repaying differs across the UK.
The threshold for students starting university in England this year will be £25,000, down from £27,295 last year.
In Wales it will be £27,295, in Scotland £27,660 and in Northern Ireland £22,015.
You do not repay anything if you earn less than the threshold.
When are student loans written off?When are student loans written off?
In England, new rules mean that anyone starting university this year will pay back their loan for 40 years before it is written off, regardless of how much is owed - a decade longer than last year. In England, anyone starting university this year will pay back their loan for 40 years before it is written off, regardless of how much is owed - a decade longer than last year.
In Wales and Scotland it is 30 years, and in Northern Ireland it is 25 years.In Wales and Scotland it is 30 years, and in Northern Ireland it is 25 years.
You still have to repay your student loan if you leave your course early. You still have to repay your student loan if you leave your course early., external
Some people may opt to make extra repayments to clear some or all of their loan early - there is no penalty for doing so. Some people may opt to make extra repayments to clear some or all of their loan early - there is no penalty for doing so., external
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