The Big Fat Guide to Student Finance 2018
Student Finance got your head in a spin? Let us put you straight! We'll show you where the money is, how much you can get and - crucially - how to get your hands on it.
Getting to grips with Student Finance might sound as appealing as Katie Hopkins on a crisis hotline, but it boils down to this: going to university is pricey. Thankfully, there's lots of cash out there to help you.
However, not only is some of that cash really well hidden, the rules about who gets what keep changing. Even keeping track of fee rises, is enough to make you cross-eyed. That's where we come in.
Why bother reading this guide?
Save the Student has been following the student loan changes for years, petitioned against higher fees, created the first ever student loan repayment calculator for the new fees and commented in countless newspapers from the very beginning of the recent shake-ups.
By no means do we support charging tuition fees but we believe it is vital that the myths are debunked and that students are aware of the facts.
Are student loans as bad as many make out? What do they mean and how might they affect you? Is it even worth going to university anymore?
Checking out the info on this page will mean you'll be less confused about undergraduate uni costs, more confident about getting the funds you need, and have a better idea how much the whole thing's going to set you back. Read on.
What's on this page?
Student Finance is never a simple topic to cover (well, except when uni 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, here's a quick summary:
- The maximum universities can charge for tuition fees in 2018/19 is £9,250 a year
- Full-time students starting in 2018 can apply for a maximum Maintenance Loan of £8,700 depending on household income (those in London can apply for more)
- The Maintenance Loan is not enough to live on for most students so you could need extra income (from a part-time job or parents, for instance) or to learn to live on less
- The average university graduate will leave uni with a student debt of around £50,000
- You don't start repaying until the April after graduation and once you start earning over £25,000 per year. Repayments are 9% of anything you earn above this
- After 30 years any outstanding student debt is written off
- Interest is charged at RPI +3% per year whilst you are at university, which continues at RPI plus 0-3% per year thereafter (depending on your salary)
- Your student loan repayments are automatically deducted from your pay cheque without you having to do anything
- Maintenance Grants are still available for current students that started uni before 2016 (as they receive a smaller loan)
- Other grants and funding are available for new starters in 2018 for those with disabilities or dependants, or those from low-income backgrounds
- There are differences between the Student Finance systems in England, Wales, Scotland and Northern Ireland
- While the cost of university education has tripled, students should be aware that what it costs and what you pay are likely to be very different
Keep reading to get a clearer understanding of what the charges - and the Student Finance on offer - mean for you.
UK universities can charge a maximum of £9,250 a year for tuition fees in 2018/19. If that sounds like a lot, it is - especially when you consider that in 2011, the most they could charge was £3,375 (jump back a few more years, and tuition was free...). However, unless you've got a time machine, £9k+ is where we're at.
That said, there's a bit of variation. Each country in the UK sets its own maximum fee for tuition, and not all universities charge the full Monty (though most do). International and postgraduate students, and those attending private institutions, will also pay different fees.
Almost! The vast majority of UK universities now charge £9,250 a year for degree courses. But not all, so make sure you check the website of any uni you're interested in for more info.
There is some good news though. The government has recently chosen to freeze the maximum tuition fees at £9,250 a year (aren't they so kind...) rather than go ahead with plans that were likely to see them increase by £250 a year from now until, well, infinity.
Having said that, this government is known for its U-turns so stay tuned to our updates and keep an eye on this page!
Differences across the UK
Here's the maximum that public universities can charge in undergrad tuition fees, depending on where you live when you apply:
|Students from||Studying in England||Studying in Scotland||Studying in Wales||Studying in N Ireland|
*In Wales, for those who started uni before 2018/19, there are fee grants of £4,800 available to Welsh/EU students and the rest of the tuition fee is covered by a student loan
If you're looking at studying a year abroad your fees can be different too. We've got the lowdown on that here.
What do tuition fees pay for?
Well your tuition (teaching), essentially. They also contribute to uni facilities and provisions. Some of it goes towards financial support for students struggling to get by, or from low-income families.
At the end of the day, you're paying for it: find out where it goes, how it's spent, what it doesn't include and, crucially, what returns you'll get on it - whether that's a better-stocked library or a better chance of getting a job when you graduate.
Should you shop around for lower tuition fees?
Most universities charge what all the others in their country charge so, unfortunately, it's not like you can ditch Waitrose for Lidl! Living costs such as rent, food and transport - the things you have to pay for up-front - may be a better way to judge what's affordable for you (see average student living costs).
Where fees matter more is if you opt to pay more than you could, such as if you get free tuition or grants in your home country that you'd lose by studying somewhere else.
Smaller colleges are also an option. Some offer the same degrees for less than their big-name rivals. Staying local (living at home and studying in your local area) can also net you substantial savings on living costs. Don't forget that UK students can study at some universities in Europe, as well as in the Republic of Ireland, for free: check our guide to studying abroad for the big picture.
The big tot-up is how you stand with the idea of graduating in debt, and whether you'd rather pay more up front, or push back as many costs as you can. Take a look at our Loans lowdown before you decide.
The bottom line is that, fees or not, getting a degree is pricey. Studying at a uni (or location) you have no love or respect for just because it's cheaper will still be a cash burner. Don't forget about where your passions lie, the uni's teaching credentials/facilities, and how both can help you get your cash back through a decent graduate salary later on!
At up to £9,250 a pop, you'd think tuition fees would see you fully paid up. They don't. You'll have to confirm extra course costs for yourself, but generally you're looking at things like books, stationery, lab kit or art materials, field trips, printing, photocopying and presentation.
Once you've costed that lot up, you'll need to allow for them in your budget to make sure you've got enough cash to get by.
This is what no one tells you before you go: living costs are the biggest drain on student pockets. While tuition costs can be pretty much forgotten about until you graduate, you'll still have immediate costs to bankroll - accommodation, bills, transport, socialising, laundry and, if you're into that kind of thing, food.
Now, there's no need to panic. Some of those can be covered by the Maintenance Loan or any bursaries and grants you're entitled to. Chances are, though, you'll also need a bit of back-up from savings, your folks, a part-time job or some smart money-making ideas.
As with course extras, get an idea of all your costs and stick them in a budget planner so you know how much you need to get by before you land on campus.
The Tuition Fee Loan
Most first-time undergraduates on an approved course are likely to be eligible for Student Finance in some flavour.
The Tuition Loan, which covers your fees, is the big one. The money's paid directly to the university, and you don't have to repay it until you leave your course and are earning enough (more about that below).
- Student Finance England
- Student Awards Agency Scotland
- Student Finance Wales
- Student Finance Northern Ireland
You can get a maximum of £9,250 per year towards your tuition depending on the cost of your course. Most prospective students should be fine, but it's worth checking the eligibility criteria for taking out the loan.
Those on part-time courses can also apply for Tuition Fee Loans.
The sole purpose of this loan is to cover your day-to-day living costs. Unlike the Tuition Fee Loan, it's paid directly to you.
You don't have to take out a Maintenance Loan, but if you don't have a mountain of cash to fall back on, it's an option. Everyone eligible to apply can get some of the loan, but getting the full packet is 'income contingent': the less household income you have, the more you can apply for (up to a maximum).
Here's how much full-time students can apply for in England:
|Where you live & study||Max. Maintenance Loan 2016-2018 starters||Max. Maintenance Loan 2012-2015 Starters|
|Live at home||£7,324||£4,960|
|Live away from home||£8,700||£6,236|
|Live away from home (London)||£11,354||£8,702|
|Live away from home (abroad)||£9,963||£7,410|
Don't forget that these are just the maximum amounts you could apply for. What you actually get will vary: the numbers are different for those from Wales, Scotland, Northern Ireland and the EU, with household income ultimately dictating what you're entitled to ask for.
As a rough guide, in England you'll need a household income of £25,000 or less to get the maximum Maintenance Loan. Above £25k, money's awarded on a sliding scale.
The table below is an indication of the maximum Maintenance Loan you can receive if you're starting uni this year.
|Household Income||Living at home||Away from home (outside London)||Away from home (London)|
If your parents earn above £25,000/year they are expected to help you out (more on that below).
Top tip: Your Maintenance Loan is doled out in three instalments throughout the year (at the start of each term), so it's up to you to make it last. Don't be tempted to bust it all in freshers' week, or it could be a long term of eating cut-price noodles!
You might also find maintenance money doesn't arrive before you get to uni - you'll need to register at the uni first, which is one of the top things to do when you get to uni. In the meantime, make sure you've got some other cash to hand to keep you going for the first few days.
What extra funding is available?
In England, students that started uni in 2016 and after can no longer get a Maintenance or Special Support Grant. This has been a bit of a bombshell. Some students worry this means they can't afford to go to (or stay at) uni - but what's the story?
Grants are Student Finance that you don't repay. The Government has stopped this free cash, and now expects new starters to take on bigger loans to, essentially, pay their own way. The total amount of maintenance money on offer hasn't changed much. However, you're likely to leave uni with more to pay back.
That doesn't have to mean uni is any less affordable. As with the Tuition Loan, you'll only start repaying when you earn enough: get the Loans lowdown to see where you stand. And remember:
- The change only affects students funded under the English system
- It only affects new starters from 2016 - if you already get a Grant, it won't be taken away (see below)
- If you want to go to university, there'll still be funding to help you get there.
If you started before 2016 and are currently at uni the table below shows the grants you are eligible to receive:
|Household Income||Maintenance Loan||Maintenance Grant||Full Amount|
Money from parents
As things stand, some Student Finance pay-outs (specifically the Maintenance Loan) take your household income (how much you or your parents earn) into account.
If there's a shortfall between how much the government contributes, and how much you really need to live on, you're expected to cough up for some of the difference yourself. More specifically, your parents, guardians or partner are expected to chip in.
In reality, that's not going to work for everyone. But whether the money's on the table or not, it's worth thinking about your options and asking your parents for money:
- Can your folks contribute any cash? Will it be a loan or a freebie? Do they have any conditions regarding how you spend it?
- If they can't help you financially, how else could they support you? Don't underestimate the power of leftovers.
Feel free to show them our parents' guide to university if you're struggling to convince them.
The next step will be working out how much money your parents need to give you while you're at university. Luckily for you, we've put together a handy parental contributions calculator which does just that!
If cash handouts are a no-go, now's the time to think about how else you're going to keep your budget in the black!
Awards and scholarships
These are the overlooked cash pots of student finance!
Some depend on academic achievement, but there are plenty of weird scholarships and bursaries - everything from studying an unusual subject to being sporty, or even where you were born. Some pay off tuition fees (reducing your overall debt), while others give cash grants or equipment, or a choice. We've got a list of sources to search for hidden cash right here.
Disabled Students' Allowance (DSA)
The DSA provides extra funding if you have a disability that affects your studies (including long-term physical conditions, mental health, and unseen or learning difficulties).
You'll need to provide evidence to be eligible but, if you are, there's cash to pay for specialist equipment, a non-medical helper, and other costs.
The allowance is on top of any Student Finance you get, isn't affected by household income, and doesn't have to be paid back. Accepting other disability related grants or support can affect whether you get DSA, so talk it over with your uni or school's adviser first, or head over to your Student Finance body.
Other student grants
Don't overlook other grants going, including for course travel costs, in-demand subjects (like teaching), and the NHS bursary. Details are in our student grants, bursaries and scholarships guide.
Universities charging the full enchilada in tuition fees have to keep some of the cash aside to help those struggling financially. Some of the money may be ring-fenced for particular circumstances, such as students from low-income backgrounds or with disabilities or dependants.
Whatever the score, if a lack of cash is stopping you from studying, talk to the uni's welfare team or student money adviser about any emergency grants or loans going. Heads-up: you'll need to take copies of your Student Finance letters and your budget.
The turn2us grants calculator can help you find charity funds based on a whole heap of criteria - everything from your religion, nationality or gender to health conditions, personal issues and family situation. Our guide to weird university grants, bursaries and scholarships is worth a read if you're not convinced that you'll be eligible for any funding.
While banks aren't the first place to turn if you're looking for a cuddle, learning how to use your student bank account properly - like when to use benefits like an interest-free overdraft - can help you get your hands on extra cash when you need it.
Your own cash
There's no denying that anything you can chuck in the pot can only help you out.
In this section:
9% of anything you earn over £25,000 per year
You'll only start repaying your Student Loan from the April after you've graduated (unless you dropout) and when you are earning more than the repayment threshold (£25,000 in England or Wales, £18,330 a year in Northern Ireland and Scotland).
Note: For those that started uni before 2012 you will start repaying when you earn over £18,330/year.
You'll pay 9% of anything you earn above that amount. If you don't earn more than the threshold, you won't pay anything.
Here's what your monthly repayments could look like (remember these are just guide figures!):
|Yearly salary||Plan 2 monthly repayments|
The repayments will be automatically docked from your wages before you get paid and, because repayments track your weekly or monthly income, if your salary goes down (or stops), you won't pay until you're back over the threshold.
Unless you're self-employed, it all happens magically without you needing to do anything or remember to make payments.
After 30 years, any remaining loan is wiped
(It's 25 years in Northern Ireland, and 35 years in Scotland). So, if you don't go into a big bucks career, you may not earn enough to pay back the full Loan.
Note: For those who started uni before 2012, your debt is wiped 25 years after graduating.
On the other hand, the more you earn, the more you'll pay back. It's worth bearing this in mind as by the time your salary pumps up to decent levels, you might want to do other things with it (such as pay for a mortgage or buy a new car)!
If you want to find out how fast you're likely to hit the salary threshold, check the average starting salary for your degree. To get an idea of whether you'll pay off the whole Loan (or how long it could take you), plug that number into our Student Loan repayment calculator.
Student Loan small print you really need to know
You pay tax on your initial salary
What's that? Double whammy, you say? Unfortunately, Student Loan repayments don't entitle you to any tax breaks. That means you'll pay income tax on your salary before the loan repayment comes off.
For example, if you earn £45,000 a year, any income tax you owe will be collected in the normal way. When your loan repayment is calculated, though, it's still worked out from that starting £45k figure. You won't pay less income tax, even though you've had to 'lose' a bit of your salary towards loan repayments.
Income doesn't just mean salary
Whether you're paying tax or paying back the Student Loan, 'income' includes any taxable money you get. That includes interest from some savings accounts over £2,000, and certain job perks or State benefits. These are worth keeping an eye on as they could unexpectedly tip you over the repayment threshold.
WARNING: The terms aren't set in stone
Shockingly, there's nothing in the loan agreement guaranteeing that salary thresholds or the 9% figure will be honoured.
In fact, the government did freeze the £21,000 salary threshold for several years despite initially saying it would go up each year. However, after a lot of campaigning from Save the Student and others, they decided to revert to the original agreement and increase the threshold each year (starting at £25,000 in 2018/19).
There is a worry that this ability to play around with the terms means that they're likely to do the same in future (for either good or bad).
Interest is the sting in the tail
Just like any kind of loan, the Student Loan whacks interest onto everything you borrow.
For students in Scotland and NI, interest is set at RPI - currently 3.3% per year (although this changes every September)
In England and Wales, however, interest is charged on top of the rate of inflation. This means you'll be charged between whatever RPI is set at (currently 3.3%, although this changes each September) plus up to 3% each year.
Here's how the interest works:
- While 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. This means that even before graduating, students will have racked up a hefty amount of interest on top of their fees
- After graduating: If you earn under £25,000 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% per year on your loan. Once you earn above £45,000, you will incur the additional 3% annual interest rate
- (A big) however: Despite all of this, graduates will actually make annual repayments of around £600 less 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.
Note: Students in England who started uni before 2012 will pay interest at RPI (currently 3.3%) OR the bank of England base rate plus 1% (currently 1.75%), depending on which one is lower.
Added interest means you'll owe more than you actually borrowed, and could be making repayments for longer. Head over to the Student Loans Company to sniff out the numbers for yourself.
It doesn't affect your credit rating
Your student debt doesn't go on your credit files so it won't affect your ability to borrow in future.
However, it could have a very small effect on mortgage applications. This is simply to do with the fact that a Student Loan will mean you have less take home pay each month. Therefore, it's not the debt but more the repayments that can have an impact (although minimal).
Finally, there's no debt collectors or angry people chasing your money with student loans. If your salary ever dips below the minimum repayment threshold you'll just stop paying altogether.
Moving abroad doesn't save you
There is a strong rumour spread among students that if you move abroad for a certain amount of years then your student debt is written off. We're afraid this is not the case and you still have to pay back anything you earn over a threshold.
Our guide to repaying your student loan from abroad has more details.
You can choose to clear your student debt or make higher repayments at any time - the question is, should you?
While you might be tempted to pay off your Student Loan in full as soon as possible, remember that the rates and terms are better than with commercial loans.
It's also worth thinking about how likely you are to pay off your entire loan based on your predicted earnings (and remember that anything you haven't cleared after 30-ish years is wiped off). Clearing the Loan early could mean paying when you don't have to, so use our Student Loan repayment calculator to see how likely it is that you'll repay.
Plus, once you've handed the money over, you can't get it back if you need it for anything else.
Think it over before you part with your cash, and only pay-up when you can really afford to.
While it's good to be cautious about borrowing in general, the Student Loan is a slightly different kettle of fish.
Firstly, it's not like a commercial loan. Yes, it's borrowing, but on more affordable terms than you'll get anywhere else. More importantly, paying it back depends on earning enough later on: in that sense, it works more like a tax than a loan.
If you don't earn enough, you won't make repayments - which is pretty much how income tax works. For that reason, it makes sense to get a Student Loan if you're eligible, rather than paying up-front (or paying back the loan early!).
Most students won't be able to afford university without the Loan, but what you get for your 'debt' - a degree - is a high value purchase. It can help you earn more throughout your career than non-graduates.
The best advice for the current system is to not get sidetracked by the total figure you'll end up owing. While that's an important number, keeping an eye on things like your graduate salary and monthly repayments (and how likely you are to repay) can give you the bigger picture of whether the loan's right for you.
ALWAYS check what other funding you could grab
Every year, hundreds of students miss out on free money because they don't know the extra cash is there. Whether you meet the low-income criteria or not, there could be funding out there with your name on it, from scholarships and emergency cash to company sponsorship.
If you don't ask, you won't get. And if you don't search, you won't find: here's where to look first.
Get a part-time job
With three-quarters of students upping their income with a job, employment is an obvious go-to for keeping debt in check. Check your uni's rules on part-time work and, most importantly, make sure any gigs you go for fit around your studies.
Make your own money!
No jobs in your neighbourhood? No problemo! There are scores of ways to make legit lolly, from freelancing to starting a bona fide student business. Need ideas? We've got 40 quick cash injections right here.
Don't lose out on tax
If you don't earn more than the 'personal allowance' each year, you won't have to pay tax on your income, whether from wages or interest you get from the bank. Don't pay if you don't have to or, if like many students, you've been over-charged, get it back!
The other biggie is that knowing what counts as taxable income - and what doesn't - can help you get the Student Finance you're entitled to. It could even make a difference to how much and when you start coughing up towards your Student Loan.
Either way, it pays to get to grips with tax: read our top student tax tips to get it done in a jiffy.
Keep things in balance
Any money coming in - whether it's loaned or earned - is just one side of the story if you're barrelling through it faster than your data allowance in a WiFi blackspot. Learn how to make it last, and you'll be on to a winner!
Hopefully this guide has given you a clearer idea of what Student Finance means for you, based on facts rather than hype. We've also shown you options beyond Loans and grants, and pointed the way to cash that can help you get to - and stay at - university. Make the most of what's out there!
Got questions? Ask away below: we promise to give every student a response, or point you in the direction of more info.