The UK has a long history of providing for the education of its young aspiring scholars, scientists, engineers, teachers, and business leaders of tomorrow. Today, nearly every undergraduate university student who resides in the UK is eligible for student loans, and many are eligible for grants as well.
The majority of UK student loans and grants are provided by the government’s Student Loans Company, which is a non-departmental public body. The Student Loans Company oversees Student Finance England and is a partner of Student Finance NI and Student Finance Wales. In Scotland, the Student Awards Agency oversees all student loan applications.
After World War II, many local education authorities paid for student’s tuition fees. In addition to paying for tuition costs, the Education Act 1962 made all local education authorities legally responsible for providing each full-time university student with a maintenance grant to help cover their living expenses.
The Student Loans Company was created prior to the 1990 academic year in order to provide students with low-interest loans to help pay for living expenses. In its inaugural year, the Student Loans Company provided low-interest loans to a staggering 180,200 students, which represented nearly 30 percent of all eligible students.
Under the leadership of Tony Blair, the Labour government passed the Teaching and Higher Education Act 1998, which created tuition fees of £1,000 for students beginning in the 1998 academic year. In the process, repayable student loans replaced maintenance grants.
In January 2000, the Labour and Liberal Democratic Scottish government decided to charge Scottish students who studied at Scottish universities with a post-graduation charge of £2,000, as opposed to the annual tuition fees they were currently paying.
However, this charge went by the wayside in 2008. On a similar note, Welsh students receive a tuition fee grant that reduces the amount of money that they owe upon graduation.
With the Higher Education Act 2004, tuition fees increased from £1,000 to a maximum fee of £3,000. By the time the 2005 academic year rolled around, the Student Loans Company was providing loans to 1,080,000 students, totaling £2.79 billion.
In 2009, the Student Loans Company was highly criticised for causing student loan application processing delays. The criticism continued into 2010 as the previous issues had yet to be worked out.
As a result, the Chief Executive of the Student Loans Company resigned in 2010, and the new Secretary of State for Education, David Willets, made the Chairman, John Goodfellow, resign as well. Ed Lester took over the reigns as the new Chief Executive.
An investigation led by Exaro News in 2012 revealed that Lester, the new Chief Executive, was being paid by the Student Loans Company through a private company, allowing him to shave tens of thousands of pounds off of his tax bill.
The day after the story was released, Danny Alexander, the Chief Secretary of the Treasury, told the House of Commons that he would have Lester’s national insurance and taxes deducted directly from his pay from that point on.
UK students are only required to meet two eligibility requirements in order to receive student loans. Firstly, they must be personally eligible, which is determined by their performance and residency status. Secondly, they must meet course and institution requirements by studying for an undergraduate degree at a UK university or other verified UK higher education establishment.
Additionally, students taking some teacher, community worker, or youth courses are also eligible for support from the Student Loans Company.
At present, every full-time UK university student is entitled to receive a tuition fee loan that covers their entire tuition cost. In 2009, universities could charge students up to £3,225 in tuition. In 2010, the allowable tuition charge was only increased by four pounds. In 2011, the tuition fee was raised to £3,375.
However, students saw a sharp increase in tuition fees in 2009, in which tuition fees were raised to £9,000 per year for the UK’s full-time students. Although Welsh and Scottish universities are also allowed to raise their tuition fees, resident students in Wales and Scotland are still able to receive free tuition.
All eligible UK students are also entitled to receive a maintenance loan to help pay for their living costs while they attend university. While each student is entitled to receive a specific amount, students who remain living at home are entitled to less than students who decide to live at the university.
Despite recent increases in tuition costs, the cost of tuition at UK universities is still noticeably less than universities in the U.S. and many other countries around the world. When coupled with the UK’s history of providing affordable student loans to nearly every eligible student, attending university in the UK remains an affordable decision.