Can I afford to go to university in 2012?
[See Power Point notes pages for more detail]
1
Tripling fees doesn't always mean tripling your costs● In 2012 all institutions will be allowed to
charge up to £6,000● Many will charge up to £9,000 providing
they make extra provisions for bursaries for poorer students
You don't need cash to go to university
●Tuition fees will be paid automatically for you●No repayments until April after graduation
3
Earn under £21,000 and never repay
●Repaid through the income tax system●Repay 9% of everything you earn annually above £21,000●£21,000 threshold rises in line with average earnings
4
30 year cut off for repayments
●Pay no more after 30 years have passed●Regardless of what you still owe
5
Above inflation interest will be charged
●During study - RPI +3%●Earning less than £21,000 - RPI + inflation●Earning between £21,000 and £41,000 – interest rate gradually rises from RPI + inflation, up to maximum of RPI +3%●Earn over £41,000 – RPI +3%
6
●Current – 9% of earnings over £15,000●New – threshold £21,000, meaning lower repayments●The following table will help to illustrate this
7
Repayments £540 a year lower than now
Continued
8
You will owe for longer, and may pay a lot more●Cost is spread over much longer period●Initially graduates have more in their pocket●Though later it's likely you'll have less as you'll still be repaying
9
Part time students
●Fees of up to £4,750 (6,750 with bursaries)●No longer need to pay up front – eligible for SLC loans●No Maintenance Loans/grants●Criteria: first degree, studying 25%+ of full-time course
10
Monthly repayments the same●Repay the same each month, whether £6,000 or £9,000 tuition fees & whether you take out the full maintenance loan or not●Important implications to how much you'll repay in total
11
Loans also cover living costs
●Students can also take out maintenance loans●Pay for living costs – food, books, accommodation, travel●Usually 3 termly installments straight to your bank account
12
How much?
●Amount of maintenance loan is assessed by your household income (“means-tested”) and whether you decide to live at home or away from home●All students are guaranteed up to 65% of total available●The remaining 35% is means tested
13
Maintenance grants
●If the household income is below £25,000, the student gets the full grant of £3,250●Between £25,000 and £42,600, the grant is on a sliding scale●Grants do not have to be paid back
14
Student loans DO NOT go on credit files
●Loan, credit card and mortgage providers only know you have a student loan if they choose to ask
●Impact on ability to get a mortgage in the future is limited
You may not be allowed to repay early
● May be penalised for repaying your student loan back early, especially as real interest is now being charged
Many people will never pay it all back
●It is estimated only 40% will ever pay back the full amount and these will only be the very top earners ●Likely many will repay the same on a 6,000 course as a 9,000
17
Think of it like a tax not a loan
Why?●Repaid through the income tax system
●Only repay if you earn over a certain amount
●Amount repaid increases with earnings
●Does not go on credit files
●Debt collectors will not chase it
●Bigger borrowing doesn't increase repayments
●Many will repay for the majority of their working lives18
Financial support available(The following may be available as well as a maintenance grant)
Fee waiver – a reduction of tuition fees
Bursary – cash/gift in kind (grant/scholarship/living costs)
Scholarship – like bursary, often depends on academic ability
19
Any questions?
20
Useful links
www.studentfinance2012.com
www.studentfinance-yourfuture.direct.gov.uk
www.moneysavingexpert.com/students2012
21
Top Related