Many students in the UK finance their higher education through student loans. They can be difficult to navigate and scary to think about, but we’re here to clarify what student loans are, as well as your entitlements and responsibilities.
What IS a student loan?
If you’re preparing to begin higher education, or are already a student, it’s likely that you’ve heard student loans come up in conversation. But what are they?
A student loan is essentially a sum of money given to students by the government to help fund their higher education. It’s inclusive of two types of loans: a tuition fee loan and a maintenance loan.
A tuition fee loan covers the cost of your course, and it is paid straight to your higher education provider.
A maintenance loan is to cover your living costs whilst you’re studying. It will go towards things like transport, equipment that you need for your studies, groceries, rent and bills. This will be paid to your bank account in instalments each semester. The amount that you receive is dependent on a number of factors, but we’ll get into that later.
How do I get a student loan?
The Student Loans Company is a government-funded body that manages all student loans. You can apply to receive a student loan here.
Am I eligible to claim a student loan?
To be eligible for a student loan, you first need to check whether your higher education provider and course qualify for funding.
If you’re studying full-time, you may be eligible to claim a student loan if you study one of these courses
- Undergraduate degree, for example BA, BSc or BEd
- Foundation Degree
- Certificate of Higher Education
- Diploma of Higher Education (DipHE)
- Higher National Certificate (HNC)
- Higher National Diploma (HND)
- Initial Teacher Training course
- Integrated master’s degree
- Pre-registration postgraduate healthcare course
- Level 4 or 5 course with Higher Technical Qualification approval
If you’re studying part-time, your course must have a course intensity of at least 25% for you to be eligible for a tuition fee loan.
Your nationality and residency also determine your eligibility. You can apply for tuition fee and maintenance loans if you:
- Are a UK national, Irish citizen or have settled status
- Normally live in England
- Have been living in the UK, Channel Islands or Isle of Man for three consecutive years prior to the start of your course
If you’re an international student, it’s important to do your own research before applying to a course in the UK. You can find more information about your eligibility here.
How much money am I entitled to?
Your tuition fee loan will cover the entire cost of your course, up to £9,250 per year.
As we explained before, the size of your maintenance loan is dependent on several factors.
- Where in the UK you’re from: each country in the UK has its own student funding body. You’ll apply for a maintenance loan through your home body.
- Where you’ll be living: in most of the UK you will be able to claim a higher maintenance loan if you’re living away from home. If you’re studying in London, you’ll be able to claim even more because of the higher living costs.
- Household income: students from households with a lower income will be entitled to a higher maintenance loan.
The average maintenance loan in the UK is £5,820.
Am I entitled to any other financial support?
If your maintenance loan is not enough to cover your living costs, you might be entitled to apply for additional financial support. There are a number of bursaries, scholarships and grants that you could qualify for. For more information, read this article.
What are my responsibilities when it comes to my student loan?
The government gives you a student loan with the expectation that you will eventually pay it back. Here’s what you need to know about repayment:
How and when do I need to start repaying it?
You can start paying your student loan back from the April after you graduate, but you will need to be earning above the repayment threshold.
Information on loan repayment thresholds can be found here.
Your student loan repayments will be automatically deducted from your salary. If you are self-employed, you will need to make repayments as part of your self-assessment tax return.
Do I need to pay interest?
Unfortunately yes! For students from England and Wales, the interest rate is currently at 6.5%. This is subject to change each year based on inflation levels.
For students from Northern Ireland and Scotland, the interest rate on student loans is at 1.5% for now.
When is my student debt cancelled?
After 30 years if you’re from England, Wales or Scotland, the government will write off your student debt. This is lowered to 25 years for Northern Irish citizens.
This means that you will stop making repayments, even if you have not paid off your student debt in full.
If you are unable to work and have to claim disability benefits, your loan will also be cancelled.
Hopefully you feel a little more clued up on student loans, and what your entitlements and responsibilities are!
Be sure to check out the Roome website, where we post loads of tips and tricks for university students every single week. Follow us on LinkedIn, Instagram, TikTok and Facebook to learn more about how we’re revolutionising the student housing market!
Posted by Owen Redman
Co-founder of Roome