Whether it's your first time away or you're returning to University or College, a student loan can be essential to allow you to follow your dreams of further education. Affordability can be a barrier to learning, so what are loans and how do they work?
If you are considering going into higher education in England and Wales, either through a university or a college, there’s no doubt that it can be an expensive process. You will be expected to pay tuition fees on top of any living costs that you accrue during your stay in education.
To this end, it is vital that you understand how student loans work before you plan your course or degree. Student loans can be a confusing; however, they need not be perplexing with a few handy tips. The first thing to understand is eligibility i.e.. who is eligible for a student loan?
Currently there are two main kinds of student loan available from the government. The first type is a Tuition Fee Loan – this is used to cover any tuition fees that you have to pay for your course or degree.
The second type is a Maintenance/Loan for Living Costs loan – this is used to help you with your daily living costs. These two kinds of loans are consolidated to form a ‘total’ student loan package.
As of the date of writing (2012), full-time students aged up to 54 can obtain a student loan, even if they have studied in higher education before. However, to obtain a student loan, they must prove that they intend to work after their course has completed and certain groups of people may not be eligible for a loan.
For example non-UK students, postgraduate students (unless they are taking PGCE courses), part-time students (unless they meet set criteria) and Diploma of Nursing/Midwifery students (although in many cases any such courses can be funded by the NHS).
If you are unsure as to whether or not you will be eligible for a student loan, the best place to ask is at your local Student Loans Company (SLC) office or via your intended university or college.
The amount that you could receive as a student loan will also differ widely, depending on your individual circumstances, the university or college that you are planning to attend and the course/degree that you intend to take. Again, as government-funded loans and grants are currently administered by the Student Loans Company (SLC), they will be best placed to advise you about the amount you could borrow.
It is worth noting that student loans are usually borrowed at a nominal interest rate. This means that you will generally won’t have to pay back any more money than the original amount borrowed.
Although interest is added to a student loan account from the date it is taken out, you won’t have to pay it back until you have graduated and you are earning in excess of £15,000. However, if you prefer, you can pay back your student loan, or parts of it at any time, you do not have to wait until you are earning this amount.
So, if you are thinking about entering higher education and you have received a University or College offer (or provisional offer) for placement, it is wise to make an application for a student loan immediately to secure the funding that you will need.