Going to university is an expensive business.
NatWest’s 2006 Student Money Matters Survey revealed that students starting university in 2006 can expect to pay an average of £33,512 for a three-year degree course, including course fees and living expenses – up by £4,912 from 2005’s figure – and are likely to graduate with debts of £14,779.
This increase is partly the result of a new 2006/2007 course fees structure through which universities and colleges can ask for a contribution of up to £3,000 a year from full-time students. The actual amount payable will depend on the university or college and the course.
Student Loan Information
Know more About Student Loan
You want to know more about student loans and student financing? Here’s absolutely everything you need. We’ve asked all the experts, read all the info and put together twenty essential facts, tips, opportunities and warnings. Read on and make the most of your money while you are studying.
After nearly 15 years in business the Student Loan Company is finally catching up with the modern world. You can apply online and whole sections of paperwork have been cut out of the process to make it faster.
You no longer have to start the process through your local council. If you need an official student loan then go direct to the Student Loan Company – all the information you need is at www.slc.co.uk
Money is normally paid out in three instalments at the start of each academic term. It is paid direct into your nominated bank account and you can even ask to be sent a text when the cash lands. The days of waiting for a cheque in the post are finally over.
The maximum loans can look pretty good. If you are studying in London and don’t live at home you can get up to £6,170 a year. Out of London the maximum is £4,400 a year. But don’t get excited. Tuition fees can be up to £3,000 a year and most students still end up with huge debts when they graduate.
Everyone can apply for up to 75 per cent of the maximum, regardless of their family backgrounds. The final quarter of the money is means-tested so students with wealthier parents may miss out.
Around eight out of ten students apply for money from the Student Loan Company. If you reckon you can live without the money the experts say you should still apply – some students save the money or invest it in high earning accounts rather than spending it.
Bursaries, grants, scholarships and other pieces of funding can make a huge difference if you are lucky enough to qualify for one. There’s plenty of information on one of the Government’s main websites. Go to www.direct.gov.uk
and look under Student Finance or Bursaries. Some of this money doesn’t have to be repaid – so it is always worth trying for.
Wherever you get your money from, good budgeting is essential as a student. You can get advice on how to do it on the official www.ucas.com/studentfinance/costs
Getting a good student bank account is vital too. Plenty of banks offer freebies to attract new customers but experts say it’s more important to base your choice on credit interest rates, low cost overdraft terms and convenient branch networks. Click on Student Accounts under Banking Best-Buys at www.moneyfacts.co.uk
for full details of all the latest deals.
If you want other information or advice on money and finance then the National Union of Students might be able to help. It’s website is www.nusonline.co.uk
. Other official places for info include www.uniaid.org.uk
If you get student loan payments you get a statement showing how much you have had and what the repayment arrangements are every April.
If you want a decent credit card or other loans you’ll need a good credit record. Always register to vote when you are a college or university – one of the first things banks check when they consider new customers is the electoral roll. If you ever miss credit card or other loan repayments this will be recorded on your credit file and can count against you in the future. So don’t risk storing up problems by ignoring bills.
You can check your credit file at any time – it’s often worth doing just before you apply for any new borrowing. If you see any mistakes on it you can ask to have them corrected. Checking a file can also show if you are the unwitting victim of identity theft and the sooner you know the sooner you can sort it out. Look at www.equifax.co.uk
for details of how to check your personal record.
In your final year as a student your student loan payments will probably fall by up to £500. That’s because the SLC reckons you can start earning straight away that summer.
Interest will have been clocking up on all your student loan payments from the moment you got them. The rates are changed every year and reflect the Retail Price Index. The good news is that this makes them pretty much the cheapest borrowing around.
Here’s the bad news – the average student currently graduates with debts worth up to £11,200 or £13,500 depending on which survey you read. Either way it’s a lot of money when you’re starting out in the workplace and probably want to buy a house one day.
You’ll not get a lot of time before you have to start repaying your student loan money after graduation. The repayments normally start the April after you graduate or leave your course. If you are earning over £15,000 then repayments will be taken out of your pay packet automatically by HM Revenue & Customs.
If you are self-employed or unemployed after graduation you need to contact the Student Loan Company to work out how and when you clear your debt.
There is a new online calculator at www.slc.co.uk
which shows graduates how much they need to pay back and when. Remember that the longer your debt is outstanding, the more interest it will be clocking up.
You’re going to want a good relationship with your bank if money is tight after graduation. Most student accounts can roll automatically into graduate deals which have better than average terms on overdrafts and might offer other benefits like lower cost credit cards and loans. Compare yours with rival offers, though experts say it can be hard to switch straight after graduation so don’t close one account before you have another one opened and ready.
Neil Simpson is a former Personal Finance Journalist of the Year and writes regularly on money-saving, banking and investment issues for the Mail on Sunday and many other publications.