If you feel the cost of a college education is too expensive of a burden, you are not alone. In 2011, 53% of undergraduate students received some form of support: loans, grants and allowances. However, these loans are not without financial risk and need to be carefully considered before making a decision.
While many countries have a large component of privatised student loans, in the UK they are primarily provided by the government through the Student Loans Company (SLC). There are also career development loans that are provided by certain banks for individuals who want to follow a specific career path.
The two student loans that you can receive from the government are the tuition fee loan and the maintenance loan. These two loans have a small amount of interest attached to them, which are paid back on a schedule determined according to your yearly income.
Tuition Fee Loan
This loan helps pay for your courses, and is paid directly to your university or college. Full-time English or EU students at a public university or college are able to get up to £9,000, while full-time students at a private university or college are able to get up to £6,000. Part-time English or EU students at a public university or college are able to get up to £6,750, while part-time students at a private university or college are able to get up to £4,500.
Unlike tuition fee loans, maintenance loans help pay for living expenses. In order to be eligible for a maintenance loan, you must be a full-time English student that is under 60 years old. The loan is paid directly into your bank account at the start of the college term.If you are a full-time student living at home, you are eligible for up to £4,375, if you are living away from home outside London, you are eligible for up to £5,500, if you are living away from home inside London, you are eligible for up to £7,675, or if you spend a year of a UK course studying abroad, you are eligible for up to £6,535.
For courses started on or after 1 September 2012, the following interest rates apply to the tuition fee loan and the maintenance loan:
The repayment schedule of a student loan is determined by your income. If your yearly income is £21,000 and under, no repayments are required. If your income is greater than £21,000, then you pay 9% of everything you earn over that threshold.
For precise repayment amounts, please view this repayment calculator.
If you decide that a student loan is right for you, then your next step is the application process. Depending on where you live in the UK, your application process may vary, but the general steps you must complete are as follows:
For specifics on the loan process, please refer to the Gov.UK student finance page.
For more information, you can also read Save the Student’s complete guide to student finance.