Rising University Fees – Is University Worth it?
Don't have time for the newspapers? No problemo! Here's this week's compact round up of the student money news you're probably better off knowing about.
As we know, the number of students applying for university has dropped this year following the rise in university fees.
The latest UCAS statistics suggest there has been a change in the behaviour of people applying for university. In June of this year, English students applying for university places dropped by 10% compared to last year.
The drop in the rest of the UK was lesser but notable, a 4.5% drop in Northern Ireland, a 2.9% drop in Wales, and a 2.1% drop in Scotland.
This years applicants are the first to face the tuition fee rise from a maximum of £3375 in 2011/12 to a maximum of £9000 in 2012/13. A link between the rise in university fees and dropping applicants has been observed.
The number of applicants from higher economic bands has dropped, suggesting even those from more advantaged backgrounds who are traditionally associated with higher education are thinking twice about university.
The number of applicants from lower economic backgrounds has risen, suggesting schemes such as bursaries are proving beneficial in making higher education more accessible to all.
Change in attitude
There are some positives to come from the hike in fees. Rising awareness of university tuition costs causes potential applicants to consider their options more carefully. While many previous students may have applied to university fairly blindly, without considering the expense much, new applicants can benefit from costs and debt being a mayor consideration.
Owen and Jake from Save the Student! appeared on BBC Radio this morning to discuss whether it was worth going to university and both said that the rise in fees could be beneficial to students who previously felt that they were being pushed into university study.
However, both stated that it is important students do not rush into a decision and that the debt may not be as bad as it may seem.
Accounting for the rise in university fees may help future applicants make a more considered decision about whether or not university is right for them.
If you are unsure about the student finance system or simply want to know how to save money whilst at university then take a look at Save the Student’s essential student guide to finance.
Know the facts
New applicants need to be made one hundred per cent aware of how the rise in university fees affects them. Applicants shouldn’t be put off university entirely just by the rise in costs.
- Students wont pay back any of their loan until they are earning over £21000 per annum. They will them repay 9% of your earnings over £21000 pre-tax. If you lose your job, or have a pay-cut, your repayments will be reduced accordingly.
- Re-payments on loans are actually lower than they were in the old system. Graduates on the old system have to pay 9% of earnings over £15795. While 2012 applicants pay 9% of earnings over £21000, meaning lower re-payments.
- While re-payments are lower annually, it’s likely you will be paying off your loan for a longer time.
- Outstanding debt is wiped-off after 30 years.
- Loans are re-paid through the tax system. Employers will take your fees off the payroll so you will never see them. You will not have to face debt-collectors.
- Interest will be charged at 3% during your time at university. This is in addition to the set rate of inflation (RPI). If you are earning under £21000, you will be charged the RPI rate of inflated. If you are earning between £21000-£41000,the rate of inflation will gradually rise from RPI to RPI plus 3%, rising dependent on the amount you are earning.
Be sure to know your facts about university loan repayments. Understand the true cost of university in 2012, and don’t let the fear of debt put your off university entirely.