Your complete guide to student loan options in the UK
There are many ways you can get funding for your university education. You might need to use several of them to afford the estimated average cost of university, which is now more than £20,000 per year when you add living costs to your tuition fees, according to NUS figures. Here we give you the full lowdown on the different forms of funding you might be able to get.
Government loans for tuition fees
A full-time UK student can generally apply for a loan of up to £9,000 to pay their tuition fees. This is rising to £9,250 in the next academic year (2017-18) when it’s expected we’ll see a number of universities increasing their fees. The tuition fee loan is paid directly to the student’s university.
Repayments kick in when you’re earning £21,000 a year, at which point you have to pay 9% of any amount you earn above this threshold. Payments are usually taken directly by your employer and paid back to the government. Interest accrues at the rate of inflation (RPI) plus 3% while you’re studying. From the April after you graduate interest is calculated on a sliding scale, depending on how much you earn, from ‘RPI only’ up to ‘RPI plus 3%’.
Government loans for living costs - maintenance loans
Students can also get a government loan to help towards their living costs, known as a maintenance loan. A full-time student living away from home in London can get the most – up to £10,702 in this academic year (2016-17) rising to £11,002 for the next academic year (2017-18). A full-time student living away from home but outside London can apply for up to £8,200 this year and £8,430 next, while a student living at home while going to uni can borrow up to £6,904 right now, increasing to £7,097 for the 2017-18 academic year.
Extra help for students on low income or from low income families
Depending on your finances you may also be able to apply for income support or get some help from the university and college hardship funds.
If you have children or adults that are dependent on you, you might also be able to claim a childcare grant, a parents’ learning allowance, adult dependants’ grant, or child tax credit.
Bursaries, grants and other student funding options
There are a number of other funding options for particular courses or specialist circumstances. One of the bigger areas is funding here is for medical, social work and teacher training students.
You can currently apply for an NHS bursary if you’re doing a certain medical-related course. You don’t have to pay these back. However, the NHS bursaries are controversially going to be scrapped after this academic year and replaced with a loan scheme from 2017-18.
Many universities also have their own bursary systems. You should check directly with your uni to see if you qualify. Again, with a bursary, you generally don’t have to pay it back.
Depending on the kind of course you’re doing you might also qualify for funding from a charitable trust. To check if you’re eligible, fill in your details at the Turn2us grant search web site.
Student loans calculator
The government has produced a handy student finance calculator to help you figure out just how much you might be able to borrow over the full length of your time at university.
Just plug in your basic details and they’ll give you a guide as to what you can apply for and any limits you can expect on your loan applications.
Loans for international students coming to the UK
EU students coming to study in the UK can normally get the same government tuition fee loan as a UK student – that is, up to £9,000 in the current academic year (2016-17) and up to £9,250 next year. International students coming from a non-EU country do not typically have access to these loans.
It’s less common, but international students may also be able to get a maintenance loan. To qualify you usually need to have lived in the UK for a few years before starting your course. You can use the student finance calculator to see if you’re eligible.
If you’re continuing your studies beyond your graduation, you may be able to get a postgraduate loan of up to £10,000 which can go towards your fees or living expenses. There are a few other potential options out there for postgrads too. The Research Councils will fund certain postgrad positions, known as Studentships. You might also be able to get Initial Teacher Training funding, a social work bursary, or NHS bursary (soon to become NHS loan). And you could try the Educational Grants Directory to see if there are further specialist funding options for you as a postgrad.
Private loans – Future Finance
Unfortunately, all of this is often not enough to cover a student’s average annual expenses. An NUS survey from a couple of years ago revealed that average annual living costs for a student in London were £13,521, with rent the biggest expense at £6,340. Student outside London needed an average of £12,160. That was for the academic year 2013-14, so it’s a fair assumption to say that living costs have only gone up since then. At that time, given that loan ceilings were lower than they are today, the average funding shortfall was calculated to be £7,600.
This is where we come in. We believe we’re your best option when all of the above just doesn’t cover your costs and you don’t have the bank of mum and dad to plug the void or bail you out. We offer loans from £1,000 that are designed around the lifecycle of a student. How? Well, we build in flexible features like lower repayments during study and 3-month repayment holidays at set times, such as immediately after your graduation. And repayments can be over 5 years.
Private loans – bank credit cards and overdrafts
We think that in many instances Future Finance is a far better solution for students than the credit cards, overdrafts and short-term or payday loan providers that so many students are using today. The interest rates are often higher on these products and the repayment periods shorter. That means they can be a good solution if you need a little extra cash now and are able to repay it in the near future, but if you’re looking for a larger amount or a longer repayment period, they might not be right for you. A student credit card with a high street bank will typically have an interest rate of around 18% APR or more.