Funding and finance for higher education and university studies. Student loans, maintenance loans and bursaries explained

Teenage girl in school uniform at desk looking sad

The thought of paying for college or university fills many young people with dread, but there are ways of making sure further or higher education is an affordable option.

Student Loans

Most students do not need to pay tuition fees upfront. Instead, the Student Loans Company pay the university or college directly. You only start to pay the student loan back once you are earning over a certain amount of money. 

There are currently two student loan payment plans:

  • Students who took out their loan before September 1st 2012 are on Plan 1
  • Students who took out their loan after this date are on Plan 2
 

Plan 1

Plan 2
Terms

You repay 9% of anything you earn over £17,775

You repay 9% of anything you earn over £21,000*

Examples

If you earn £19,000 you repay 9% of the amount over £17,775, which is 9% of £1225.

Repayment over the year: £110.25  

If you earn £22,000 you would repay 9% of £1,000.

Repayment over the year: £90

*After April 6th 2018 this threshold will be raised to £25,000

If you earn below the threshold on Plan 1 or Plan 2 you do not make any loan repayments.

Some people argue that a student loan should be seen as a graduate tax rather than a loan. Because you make repayments based on how much you earn, the idea is that the people who financially benefit the most from going to university pay the most back.

If someone went to university but after graduating never earnt above the threshold, they would not pay anything back.

If someone went to university and went into a higher paid job after graduating, they would pay back more.

In addition, the entire debt is wiped after 30 years. Apart from the very highest earners, most graduates will pay their loan back bit by bit each month until it is wiped.

See the Student Loans Company website for more information about how much tuition fee loan you are entitled to.

University Maintenance Loans

You may also be able to receive a Maintenance Loan to help cover living costs while studying. The amount you are awarded depends on where you live, where you study and your household income.

The Maintenance Loan is usually paid directly into your bank account in three instalments, one at the start of each term. You are entitled to a maximum amount of loan. For more information, see the Student Loans Company website

You might be able to receive extra Maintenance Loan support if you are a single parent, if you have a disability, or if you are returning to a course after having taken an agreed period of leave due to illness or caring responsibilities that have now ended.

For more information about who qualifies for additional Maintenance Loan payments go to the Student Loan Company website or use the Government’s Student Finance Calculator.

Bursaries for students in higher education

If you are interested in continuing in education and need some financial support you may be eligible to apply for a 16 to 19 Bursary Fund to help with some studying costs, such as equipment and travel expenses. The bursary is paid directly by the school, college, university or training provider . They will decide how much is paid and when you will receive the payment .

There are two types of 16-19 Bursary: the Vulnerable Student Bursary and the Discretionary Bursary. 

Vulnerable Student Bursary:

You could be eligible for up to £1,200 if you have recently left Local Authority care, or are in receipt of Universal Credit or Income Support.

You may also be entitled to apply for the bursary if you receive Disability Support Allowance and either Employment Support Allowance (ESA) or Universal Credit, or Personal Independent Payments and either ESA or Universal Credit.

The amount of money you receive depends on how long your course is, how many hours a week you are in education and the cost of expenses for your course.

Discretionary Bursary:

Each college or training provider has their own criteria for the Discretionary Bursary. Speak to the finance office for more information. You may be able to apply if you are aged over 19 but continuing on a course you started while aged 16-19.

You need to apply directly to your college or training provider for either the Vulnerable Student Bursary or Discretionary Bursary.

The 16-19 Bursary is not available to students at university, but your university may have other bursaries or scholarships available. Contact your student finance office for more information about available support and how to apply.

Budgeting your student finances

It is important to be aware of how much money you having coming in and how much you are spending. For many people, living away while studying is the first experience of paying rent, bills and managing an income.

Keeping track of your cash by writing and following a budget can help you keep on top of things.

When writing your budget bear in mind that your outgoings might be monthly or weekly but your loan payments are termly. It might be a good idea to keep your loan payments in a separate account and transfer the money that you need each week. This could save you from finding yourself short in the last few weeks of term.

The Brightside student finance calculator  and the Which? student budget calculator can help you work out your income and budget.

Apprenticeships

Alternatively, you might be more interested in an apprenticeship. Apprenticeships are a way of learning new skills while working with experienced staff and earning a wage. There is often some classroom-based learning alongside, for example, one day a week in college and four days at the job. Apprenticeships can provide a range of qualifications equivalent to GCSEs up to Bachelor’s, or even Master’s degrees. However, not all apprenticeships result in a qualification. During your apprenticeship you are legally entitled to the national minimum wage. How much this is depends on your age. You are also entitled to 20 days paid holiday per year. Some apprenticeships may pay you even more. 

You can search for courses and apprenticeships through the National Careers Service.

Additional Support

If you have a learning difficulty or disability it does not mean you are excluded from further education. Natspec is the membership association for colleges and teachers that offer further education and training for students with special educational needs. Visit Natspec’s website to search for colleges based on geographical area or special need provided for.

More information: