The Big Fat Guide to Student Finance 2015
Student finance – it’s all very confusing now isn’t it? Why can’t university just be free and simple like it used to be?Well, the reality is that the student finance system in the UK has gone through some huge and very controversial changes since 2012, resulting in higher tuition fees (for most students). But £9,000+ tuition fees is not the only headline! Along with the fee hike, there are new student loan repayment and application conditions which you really need to know about.
Why bother reading this guide?
Save the Student has been following the developments, petitioned against higher fees and commented in countless newspapers from the very beginning with the unveiling of the Browne report in late-2010. So by no means do we support the rise but we believe it is vital that the myths are debunked and students are aware of the facts.
Are the changes as bad as many make out? What do they mean and how might they affect you? Is it even worth going to university anymore?
If you can stick with us and get through this page (we know it’s not the most riveting topic!), you’ll be in the best position to manage your future finances and avoid any surprises.
Prefer an ebook? That’s cool, go ahead and download our free book, The Essential Student Guide to Finance. It’s got loads more juicy bits beyond student finance!
What’s on this page?
- In a Nutshell
- How much will university cost in 2015?
- How much is my university charging in 2015?
- Don’t forget the Maintenance Loan!
- What funding is available to students in 2015?
- How much of my student loan will I pay back?
- How will I repay my student loan?
- When should I repay my student loan?
- 5 tips for slashing student debt
Student finance is never a simple topic to cover (well, except when university was free!). On this page we’ll touch only on the most important things students need to know. But if you’re struggling to find the will to digest it all right now, I’ll lay down a quick summary:
- The maximum universities can charge for tuition fees in 2015 is £9,000. That’s a three-fold increase on 2011.
- Full-time students can apply for a maintenance loan of £5,740 (more for those in London)
- The average university graduate will be saddled with a student debt of around £43,500
- You pay back 9% of everything you earn over £21,000 per annum
- Biggest myth: You do not pay a penny for your education until you graduate and earn a decent salary!
- After 30 years any outstanding student debt is written off
- Interest is charged at the rate of inflation +3% pa whilst you are at university, which continues at 0-3% pa thereafter (depending on your salary)
- Your student loan repayments are deducted from your paycheck by your employer
- Funding and support is available for a good proportion of students, but especially those from lower income families
- Many of these changes now apply for part-time students, however they cannot apply for a maintenance loan
- There are differences between systems in England, Wales, Scotland and N. Ireland
- Whilst the real cost of university education for some is tripling, some students will also be better off under the new system (see our calculator)
Still with us? Keep reading to get a clearer understanding of what the changes mean for you based on the facts.
As of September 2012, the maximum a university in the UK is able to charge in tuition fees is a staggering £9,000 per year for a full-time undergraduate. There is, however, some variation in cost between countries (see below).
Prior to 2012, university fees in England stood at £3,375 pa, and pre-1998 university education was free.
Differences for universities across the UK:
England – UK students to pay a maximum of £9,000 pa, except Welsh students who won’t pay more than £3,575.
Scotland – Scottish students can still study for free in 2015. However non-Scottish students will pay the full amount.
Wales – UK students to pay a maximum of £9,000.
Northern Ireland – Northern Irish students pay £3,575 pa. However other UK students will pay the full amount.
EU students can apply for much the same as British nationals. Other international student tuition fees will not be affected by the changes.
Tuition fees and basic living costs can be covered by a student loan, repayable only when earning above £21,000 pa. The government has also brought regulation into place stating that any university looking to charge over £6,000 will have to supply extra financial support to its students from low-income families. However, as we’ll see below, over a third of universities in England plan to implement the maximum £9,000 fees, with many predicting that the average university and course will charge £8,500. Find out what your university will be charging.
If you’re looking to reduce the cost of your degree, then look towards colleges and smaller universities which have cheaper fees to attract more students. For example, Manchester college has stated that they will be charging £5,585 a year for their degree courses. It might also mean they are local to you so you’ll save a few grand by living at home. We’ll cover a few other ways to cut your student debt amount later on.
However, as we’ll see, it’s important to know that a cheaper degree isn’t always the best way to go, even if you are concerned about price. No student will have to pay for their education up-front, and will only start repaying their student loan upon earning a decent salary.
Applying for student finance
For more information on the types of student finance available for UK students see the websites below.
England: Student Finance England
Scotland: Student Awards Agency for Scotland
Wales: Student Finance Wales
Northern Ireland: Student Finance Northern Ireland
Use the search field in the table below to find any UK university’s maximum fees:
|University||Planned Tuition Fees 2012 (£)|
|Bishop Grosseteste University College Lincoln||7,500|
|Blackburn College (University Centre)||7,000|
|Brighton and Sussex Medical School||9,000|
|Canterbury Christ Church||8,500|
|City University, London||9,000|
|College of Law||9,000|
|Glasgow School of Art||6,750-9,000|
|Harper Adams University College||9,000|
|King's College London||9,000|
|Liverpool John Moores||9,000|
|London School of Economics||8,500|
|London South Bank||5,950-8,450|
|Newman University College||8,500|
|Norwich University College||8,500|
|Queen Mary, University of London||9,000|
|Royal Agricultural College||9,000|
|Royal Veterinary College||7,500-9,000|
|St. Mary's University College||8,000|
|Trinity St. David||9,000|
|University of the Arts London||9,000|
|University Campus Suffolk||7,500-8,000|
|University College London||9,000|
|University College Plymouth Marjon||7,800|
|University of East Anglia||9,000|
|University of Central Lancashire||9,000|
|University of East London||9,000|
|University of the West of England||9,000|
|University of West London||7,500-8,200|
|York St. John||8,500|
Notes about the figures:
- These are the proposed fees for all universities in 2015 within the UK.
- Universities in Wales, Scotland & N. Ireland will also raise their fees, though this may not always affect their national students.
- Welsh students who study outside of the UK will have anything above £3,575 paid by the Welsh Assembly.
- Figures correct as of Jan 2015. All figures are correct for a student looking to study a full 3 year undergraduate degree.
- Fees shown are a maximum. Some courses may offer lower fees.
See which universities will be charging £9,000 for more info.
The maintenance loan is often forgotten when discussing the rise in tuition fees. It’s entirely optional, though the majority of full-time students in the UK will have a maintenance loan of £5,740 a year (part-time students are not able to apply).
This is not a loan from the university but from your local funding body, and its sole purpose is to cover your living costs. It is normally received in 3 installments during the year. A maintenance loan is borrowed money that is added to your student loan, and you’ll have to pay it back at the same rate as your tuition fees.
If you were to add this amount to the average cost of the tuition fee loan over a degree of 3 years, you are looking at an alarming student debt of £43,500*!
Some students living in London can apply for a maintenance loan of up to £8,009 a year, adding on another £7,000 over 3 years. So take into account where you want to study, as it can have a long-term financial impact on your total student debt.
The amount you are eligible for depends on a number of factors, including your combined household income and place of study (inside or outside of London).
|Where you live & Study||Maintenance Loan|
|Living at home||£4565|
|Living away from home and studying outside of London||£5740|
|Living away from home and studying in London||£8009|
|Spending a year of your course abroad||£6820|
If your combined household income is below £42,620 then you will be able to subsidise your maintenance loan with a maintenance grant. For more information on this see the section on what funding is available below.
* These figures are based on the 2015 maintenance and student loan figures given by DirectGov. These figures only apply if you are a full-time student, your family has a household income above £42,620 a year and you receive no grants, scholarships or extra funding.
As the cost of university fees in 2012 rose, so did the need for more students to seek additional funding (aside from a student loan) to study their chosen degree. This could come in the form of bursaries, scholarships or grants.
Any university looking to charge over £6,000 will legally have to offer more funding, especially to students from lower-income families.
Below is a quick overview of the most important sources of student funding available in 2015, including a few things to watch out for. For a full review of funding, see student grants, bursaries and scholarships.
Students are eligible for a grant if their family earns below £42,620 a year. The maximum available is currently £3,387 pa, which is non-repayable. However, it’s important to note that for every £1 you get as a maintenance grant, your maintenance loan is reduced by 50p.
If your family earns below £25,000 a year then you will receive £3,387 as a non repayable grant but also have your maintenance loan cut to £4,047 (total £7,434 if you are living away from home outside of London).
See the table below for an idea of what your total funding could be (living away from home outside of London).
|Household Income||Maintenance Loan||Maintenance Grant||Full Amount|
The National Scholarship Programme
Note: We are still awaiting confirmation on whether the NSP will be available in 2015.
If your family’s household income is below £25,000 a year then you will be eligible for the National Scholarship Programme.
The amount you get from the programme will not affect your student loan amount (unlike the maintenance grant). If you are eligible then you will be entitled to a maximum of £1,000 plus accommodation, or fee waivers.
Universities differ in what they offer, you can find out what each prospective university offers here.
Awards and scholarships
These are a bit different to student grants in that they are awarded for outstanding academic achievements rather than being purely income assessed. A surprising amount of students are unaware that they are able to receive funding for a whole range of things, including their birthplace!
Disability student allowances
There are three kinds of DSAs, covering equipment and general care, which help cover the cost of studying due to a disability. They are not income assessed and apply for all ages.
Students can apply for Disabled Students’ Allowances when they apply for other student finance. For further details see www.direct.gov.uk/studentfinance.
Other types of student grants
There are some other grants available such as the special support grant, travel grant, teaching grant and the NHS bursary. For more information see Student grants, bursaries and scholarships.
There are a number of factors which will determine how you repay your student loan (both tuition and maintenance loans).
With the changes in the British student loan system, you are likely to owe much more than before 2012, however you do not necessarily have to pay the whole loan back.
Moreover, you will only start repaying your loan once you hit a higher salary of £21,000 (previously £15k). So what you will have to ultimately repay largely depends on the salary you achieve as well as the length of time you have a student loan.
Most graduates will hit the £21k threshold within a few years, but you can check the average starting salary for each degree.
Once you’ve got a reasonable value for your average salary, use our accurate student loan repayment calculator to work out exact repayment figures and dates.
Typical student loan repayments for various salaries:
|Salary||Monthly Repayment||Yearly Repayment|
To fully understand how much you will pay back and over how long, we need to take a closer look at the details.
Pay 9% of anything you earn over £21,000 pa
Graduates will leave university with an average student debt of £40,000+. Under the old student finance system, graduates are required to repay 9% of all earnings over £16,365 per annum (in 2015 & rising each year with inflation). Under the new system graduates will repay 9% of anything above £21,000 pa.
Any student debt you have remaining after 30 years upon graduating will be written off, however this is an additional 5 more years on the previous 25 year cut-off.
So in theory, you will repay less on your student loan every month under the new system.
Also, you should have noticed that you still end up paying back the same amount every week whether your yearly tuition fees were £7,000 or £9,000. It will just take you more time to repay them if they are £9,000. Therefore it’s important to remember that despite your total student debt being higher, your repayments are just as affordable under the new system.
You pay tax on your initial salary
Unfortunately, paying back your student loan does not entitle you to any income tax breaks. You will be taxed on your income before the loan repayment comes off.
For example, if you earn £45,000 a year then you will pay income tax on that amount before having to repay £2,160 of that towards your student loan. Basically, tax and student loan payment are separate things calculated from the same salary figure.
WARNING: The government can change the repayment conditions at any time!
Some top economists have spotted that there is nothing in the student loan agreement guaranteeing that the 9% or £21,000 figures are fixed indefinitely once you graduate . Just something to watch out for which is rarely reported.
Interest will be charged on top of inflation
With the old student loans system the interest on repayments is set at the current rate of inflation (RPI). In theory, your wage should grow at the rate of inflation over time and therefore it is essentially 0% interest (commercially speaking, though it’s a bit murky).
Unfortunately, with the new student loan system, interest will be charged on top of inflation. Essentially the Student Loans Company (SLC) will be making a tidy profit off lending to students. Below is a quick guide on how this added interest will affect new students.
Whilst at university: You will pay the rate of inflation (RPI) plus another 3%. This will be the same until April in the year following your graduation. Even before graduating, students taking a loan with the SLC will have racked up a hefty amount of interest in addition to the higher fees.
After graduating: If you earn under £21,000 then your interest rate will be set at inflation (RPI), as with the old system. For every additional £1k you will be charged an extra 0.15% pa on your loan. Once you earn above £41,000 you will incur the additional 3% annual interest rate.
(A big) However, despite all of this, graduates will actually make repayments of £540 less every year compared to the old system. The catch is that the total debt will be much higher and therefore you will be paying off your student loan for a longer period.
3 more brief points:
- Savings count:
If you have savings or alternative investments of over £2,000 then any interest you make on your savings will be counted towards your income. For example, if you earn £19,000 a year you will have to make over £2,000 that year in savings interest in order to break the student finance threshold. To give you an idea (£67,000 at an interest of around 3% will equate to £2,000).
If you are self-employed then you will have to file your self-assessment each year. You will need to take into account your salary for the year and pay 9% on anything over £21,000.
- Moving abroad:
There is a strong rumour spread across universities that says if you move abroad for a certain amount of years then your student debt is written off. I’m afraid this is not the case and you still have to pay back anything you earn over £21,000.
Simple. Your minimum student loan repayment comes out of your basic salary once you hit the £21k salary threshold. Unless you are self-employed, it is your employer’s responsibility that the right deductions are made.
You can choose to clear your student debt or make higher repayments at any time, however it’s not always a good idea if you can’t afford to in the long term.
Whilst you may be tempted to pay off your student loan in full to avoid added charges, it’s important to remember that even at 3%, the rate is far cheaper than normal commercial loans. Only pay it off when you are financially comfortable and are not likely to need the money in the future.
There’s also been some suggestion that the Government may bring into force a piece of regulation that either doesn’t allow early repayments or penalises you for doing so. We’re not 100% on this, but we’ll look into this later.
So you know the broad types of funding which are available to help cut the cost of attending university. Now it’s worth absorbing a few nuggets of advice to help you save you time when applying, and ensure you’re making an informed choice.
Always search to see if you are eligible for any funding
Every year hundreds of students miss out on free money from a whole variety of sources simply because they are unaware these money pots exist for them. Even if you believe that you don’t fit the low-income criteria, there are still opportunities to secure funding through scholarships and even company sponsorship.
If you don’t search, you won’t find. If you don’t ask, you won’t get! As tuition fees treble, there’s no better time to seek out external funding.
I won’t go into much detail here on how exactly to find funding as we’ve got a page dedicated to Student Bursary and Scholarship sources.
Choose a bursary over waived fees
Universities now have an obligation to offer students from a lower-income background financial support, either in the form of a bursary or tuition fee waiver. If you get the option then choose the bursary, here’s why:
As we’ve seen above, graduates pay back the same every year, whether their degree cost £6,000 or £9,000 a year. Some students will never have to pay back the entirety of their student loans, so in this case a fee waiver would mean that you miss out on a student loan.
More to the point, student loans as of 2012 don’t start becoming repayable until you’re over the £21k. So our advice would be to take the bursary upfront and then take the fees on as your student debt.
Get a part-time job
This may not be traditional student funding (in terms of money for doing nothing more), however a student part-time job is a very good way of paying for your education whilst you’re taking it. There are lots of jobs which are be flexible around your studies. With the increase in tuition fees, getting a part-time job will be essential for a growing number of students in 2015.
Ask your parents for some money
Yes, it’s a little cheeky, but if your parents are in a position to financially support you through some part of your university then it can be a big helping hand in allowing you to concentrate on your studies. Just reassure them you’ll do a good job at looking after them when they need you in the future! More on that here.
Make your own money!
A student job isn’t for everyone, and there are lots of other ways you can make relatively easy money whilst studying. Lucky for you, we’ve shared lots of them with you in our Quick Cash Injections guide.
Remember! Your loan or funding is just one side of your student budget. Learn our best ways to save money as a student and you’re overall student debt will be slashed!
You made it! Hopefully this guide to the new fees system has given you a clear idea of what it means for you, based on facts not hype. Of course there’s a whole heap of information out there which we wouldn’t want to bore you with, but use this as a launch-pad to send you in the right direction.
If you are looking to apply for student finance, then you might want to read how to apply for student finance.
You’ll no doubt have some questions, so please do ask away below and we promise to give every student a response.