Student
Loans
Student
loans assist those wishing to further themselves through education, but
do not have the financial support from their parents or means to get through
financially of their own backs. You borrow the loan at a very good rate
and start paying it off when you start earning after your education is complete.
Gone are the times when students could get by at university on a maintenance
grant. Nowadays it's almost impossible to go on to higher education and
support yourself without taking out a huge student loan from the Student
Loans Company (SLC).
Both the amount of fees you will have to pay and the amount of student
loan you will be entitled to are assessed by your local education authority
(LEA) - or the student awards agency in Scotland - and are based principally
on your parents' income. Exceptions are if you are married, over 25, have
been supporting yourself for at least three years, are an orphan, or are
in care.
The student loan process
The LEA will inform you of the amount you are expected to contribute
towards your fees and will pay the balance straight to the university.
In the academic year 2002-2003, for example, students were expected to
contribute a maximum of £1,100 towards tuition fees - a quarter
of the £4,400 one year of academic study is estimated to cost. Once
it has decided how much loan you are entitled to, the LEA will inform
the government-owned Student Loans Company, which issues the cheques.
You will not get a cheque for the full loan amount at the start of the
year. The loan is paid each term, in two or three instalments depending
on when you apply for it.
You will eventually have to pay the cash back, but with this facility
last year you could get up to £3,905 for the first year if you live
outside London and £4,815 in the capital (figures change annually).
Individual entitlements
The amount of funding you actually receive depends on which year you
are in and where you live. You are automatically entitled to 75% of the
loan limit but the rest is means tested according to your parent’s
income. If your parents' combined income is less than £20,480, your
LEA will pay the whole amount of your fees. You should also then be entitled
to the full student loan.
If your parents earn up to £30,501, they will be expected to pay
something towards your tuition fees, but not the full whack. Anything
over that, and you are unlikely to receive assistance. Unless you have
brothers or sisters at university, you will be expected to pay the full
£1,100 tuition fees and will probably be entitled to only 75% of
the full loan entitlement.
You will be entitled to slightly less of the maximum student loan in
your final year. The assumption is that you will be working by the summer
after graduation. Final-year students will typically be entitled to a
maximum loan of £3,390 or £4,175 in London.
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