Undergraduate student finance

Student finance is a really big topic for students when they're thinking about going to university. It can be a barrier to some groups. And there are 2 groups that often have the most concerns when it comes to money and university.

Group 1

Lower income households that can often be debt-adverse. The way the student finance package is often talked about can sometimes reaffirm that aversion to debt.

Group 2

Middle income earners. These students will get less support from a maintenance loan for living expenses and might not have done as much research on funding. It can often come as a bit of a surprise when they get to university and look at their maintenance loan and living cost support.

Dispelling the myth that university isn't accessible

1. The key messages to talk about are the price tag versus the cost to the learner. The price is the amount of money the student borrows and the cost of the learner will be the repayment contributions that students make. Often those 2 sums of money can be can vary quite a lot.
2. The second message is that you don't need to pay up front. The support package for low income households for living costs is the biggest it's ever been.
3. The student finance system isn't like other debt. The loan isn't like any other commercial debt or loan. This is really important to reiterate, especially for students that may be adverse to debt. 

When talking about student finance, we're referring to 2 bodies; The Student Loans Company and the Department for Education.

Student Loans Company

Student Loans Company are the people that give the money and also the people that recoup the money. Students will be dealing with the Student Loans Company after they finish their studies at university.

Department for Education

The Department for Education are the people that write policies about student finance, or Student Finance England. And that's the funding body that I'll be talking about when I'm talking about the finance package. But Student Finance Wales, the Student Awards Agency Scotland and also Student Finance Northern Ireland also have their funding packages and the premise is similar. 

Student Finance England have 3 pots of money. 

Tuition fee loans

First is the tuition fee loans, this is talked about a lot when it comes to going to university. Tuition fees are capped at £9,250 a year for full time courses at public funded universities, with different fees for part-time and distance learning courses.

You also pay tuition fees on placement years, set at £1,850 a year and universities can choose where they go up to that amount. At Portsmouth, we make our tuition fee for a placement year £925.

Placement year fee

Parents may question why there is tuition fees for a placement year, but it's still an integral part of the learning that a student undertakes. It'll still be work based learning, and they'll still have access to academics and will still be submitting assessed coursework and have access to all facilities at the university as well. We know that placement years make a massive difference to the outcome of students in terms of their degree result so if those students that are worried about the price tag of going to university don't take that placement year then they can really miss out at the end of it.

Living costs loans

Living costs are there to cover things like rent, food, any sort of bills. That's because students can't be expected to work full time and study full time. So the maintenance loan is the loan that has the household income assessment with it.

This money is paid directly to the students in three instalments which can make it hard to budget. We try to support our students with budgeting and give them the tools they need to make sure that money isn't a concern whilst they're studying and isn't a distraction from actual study and success at university.

The maintenance loan is grouped together with the tuition fee loan and repayment after university depends on earnings. It's not about that price tag, not about how much the student borrowed it's about by how that they've benefited from that qualification after they've left university.

Extra support loans

The next pot of money is the extra support pot of money. This is the non-repayable section of funding. It's there to support students that need it the most, but many don't even know that it exists.

For example, the Disabled Students Allowance is there for extra support for students with a disability, long-term illness, and mental health conditions, specific learning difficulty. It's based on needs rather than income so students have to undergo a needs assessment and whatever money or allowance they are provided in order to purchase services or to fund transport is non-repayable.

Students can apply at any time whilst they're at university. I know that some universities find that because of the types of courses that students go on to, they have a large amount of undiagnosed students, possibly with a specific learning difficulty. And once that's been made clear, or they've been diagnosed at university then they can apply.

There's no kind of limits when you can apply for that. It's changed recently so before it used to have four headings that the fund came under. It's been grouped together this year, so it'll be £25,000 per year to cover all of those headings. The transport or travel costs or travel allowances still remains technically uncapped, so that is something that students can still get if they need to and they will be expected to meet the first £200 of any claim for computer equipment. Universities will have different set ups, so at Portsmouth we pay back that £200, but Disabled Students Allowance, it's really, really important that students that might be entitled to it apply as soon as possible so that funding is there in place so they can buy the services and the equipment they need in order to make sure they can access their studies at the start of term, along with all their other cohort, so do encourage students to apply for that as soon as possible. It's applied for at the same time as the tuition fee loan and maintenance loan through Student Finance England on that application form.

There's also non-repayable support for students with dependents. So this is income assessed. There's Parents Learning Allowance for students with children, there's the Childcare Grant and also the Adult Dependents Grant so for students who have a partner who has no income. So that's also money that doesn't need to be repaid. And students can apply for that again through the Student Finance England online application.

Then there are university bursaries and there are lots of these, so each university will have its own package of bursaries that they will have for students to apply for. Some will be based on household income. Some will be based on personal circumstances. There might be some for academic or extracurricular activity and some will be subject specific. 

An easy process. It's an online portal that takes about 15 minutes to complete.

Create an account

Students need to create an account and get their customer reference number. After this they'll be asked to provide information for a secret question and a password. This information is important to remember as they will be asked for it every time they communicate with Student Finance England.

Apply and cancel anytime

We say to students that even if they don't know if they're going to apply for university, they should apply for student finance. If they don't draw down on the money, then they never enter kind of a financial contract with Student Finance England or the Student Loans Company and can cancel their account at any time.

If they haven't decided whether they're going to University yet, maybe because they're waiting for exam results, it's still best to apply for student finance so that they don't have to apply during clearing which is a period

What's needed to apply?

• Proof of identity like a birth certificate or current passport.
• National insurance number – as money won't be released with out it. Students will need to contact the Department for Work and Pensions if they don't have their national insurance number.
• A bank account for the money to be paid into. 

Dates for the diary

In terms of timeline applications open at the end of February. They don't even need to have submitted their UCAS application in order to apply for student finance, when they go in and they choose the university and the course it's just a best guess. It's fine because they can change it once they've got the results or once they've got their offer in, and then depending on where they go it might change their allowance if they're going to be studying in London or living in London.

How long for applications to be approved?

Apply as soon as possible. It can take around 6-8 weeks for applications to be approved. And that's if students haven't to go back and forth for things like national insurance details or maybe parents having to confirm income. So, you know, if a student applies in August, 6-8 weeks is really close to the start of term.

There are some students that don't want to take up student loans and it can be because of the interest that's added.

When is interest added?

Interest is added from day 1. It's added while they're studying and it then goes on a sliding-scale based on income. It doesn't affect monthly repayment because monthly payments are based on earnings. But it will impact the length of repayment if you're a really high earner.

Around 80% of students don't repay what they borrow plus the interest so the interest rate really doesn't make much difference. The idea is that the money they borrow is worth the same when they borrow it as when they pay it back.

Outstanding balance

After 30 years, any balance is wiped off, including the interest.

Every university and every city has slightly different living costs. Quite often universities will have the figures on their pages, as we do for students living in Portsmouth.

Guidance for students

One of the things that you can do as advisers is when students (maybe from middle income households) are finding they're getting the lower amount of maintenance loan is get them to really think about their accommodation:

• Do they need to live in a really snazzy block of flats near the city centre or could they live in slightly cheaper accommodation?  
• Do they want to live at home and commute? Would they be happy to live at home for their first year while they get a bit more comfortable with their friends and then move out in the second year?

Halls and private accommodation

When it comes to halls and private accommodation, there's no payment upfront, so students need to think about deposits for rent and accommodation. If a student enters a contract with a private accommodation provider and they don't end up going to that university they may not get their deposit returned.

Their contract is between them and the private accommodation provider, the university doesn't really have much sway at all. If they go into university halls and they pay a deposit (£250 pounds plus the holding fee), if the student doesn't end up going to university, then that deposit can be returned.

Advice for parents

When parents are thinking about accommodation, we would encourage them to really think about the contract they're being asked to sign as well as who they're signing with if they're having to sign with other students' parents as well.

Based on income

It's important to give an idea to parents, supporters and learners that repayments are based on income and taken directly from their salary. If a student is self-employed, it will be taken through their tax assessment.

Repayment dates

Students enter repayment the April after leaving university, which is the next tax year. Even if a student doesn't complete their course, they'll still be entering repayment for any money they might have borrowed.

Threshold

Crucially, students only make repayments once they reach a certain income threshold. If they earn below this threshold, they don't make any payments at all.

The threshold is based off an individual's earnings so if they're in a civil partnership or marriage, where their partner earns above the threshold, they still wouldn't have to repay any contributions.

Once they reach the threshold, the repayment amount is 9% of everything earned above that threshold. After 30 years it's written off.

Students living abroad

Repayments do still need to be paid if learners live abroad, and there's a list of thresholds for different countries based on the cost of living in those countries. Students will be expected to repay based on the cost of living, meaning that this country-by-country threshold will be slightly different but it will still be based on the 9% percent rule.

Up until now, EU students have been grouped in with home students who've got access to public funds at university, meaning they've been able to access tuition fee loans.

2021 and onwards updates

From 2021, the government have stated that you must have settled or pre-settled status under the EU settlement scheme in order to get student finance. This doesn't apply if you're an Irish national.

We strongly recommend going to the student finance webpages on the gov.uk website to learn more.

Well, yes there is a deadline for student finance. In terms of timelines, nine months after you start studying is the deadline for student finance, the last time at which you can apply.

A student starting this September will have until May in order to submit their student finance. If they start university and think actually I didn't want a maintenance loan I don't need it, but things change, then they can apply for it later on. But we encourage students to apply by the May before they start studying. So their finance is in place for the September or October when term starts.

 A common question parents and guardians have. No they don't affect credit scores. As student loan doesn't appear on a credit report, it can't affect a credit score. However, graduates may be asked about it as part of a mortgage affordability check.

Student finance applications usually open around February to March. Some years the process can be delayed, but the expected timeframe is typically the end of February. Students and supporters should check Student Finance England’s social media channels for the latest updates and resources, as they often share useful materials that can be reposted, printed, or displayed on college screens.

Delays in applying for student finance can create difficulties once students start university. Each year, many students begin their course without having submitted their application, which can lead to stress and issues with arranging fee payments. Encouraging students to submit their application early helps reduce this risk. Applications can be cancelled or deferred if plans change.

If a student decides to defer, they will need to submit a new assessment the following year. However, if their application had already been agreed in principle, they can be confident in their eligibility. Residency criteria, national insurance number checks, nationality status, and other factors that typically cause delays would already have been verified.

Yes, interest will be added to a student's loan. This is currently calculated as inflation, plus up to 3%, depending on how much they earn. But remember, the amount they’ll pay back every month is not affected by how much they owe, only by how much they earn.

Proving estrangement can be challenging for students, as it requires evidence of an irreconcilable breakdown in the relationship. The process has been made easier in recent years. Students can ask the university for support, and a teacher who knows them well or a relevant professional, such as a medical professional, can also provide supporting evidence.

Student Finance England now has dedicated staff to assist with estrangement cases, which helps make the process more straightforward. Students can contact them directly for guidance. Universities are also usually willing to help students navigate this, as it can be a difficult time.

There's also some great information and advice provided by Stand Alone.

No. Going to university would be difficult for many students without a student loan. The government has created a loan system with the access in mind, ensuring that repayments remain affordable. They’re also different from other loans, as the money owed is written off after 30 years.

No. Bigger loans don't mean bigger monthly repayments. Repayments are based on how much a student earns, not how much they owe.

Students who are not UK passport holders may need pre-settled or settled status in order to access student finance. This requires meeting specific residency criteria before applying. In addition to this, all students normally need to have lived in the UK for three years before the first day of their course to qualify for home fee status and the standard funding package. This applies even to UK nationals who have lived abroad for an extended period.

Because eligibility can depend on individual circumstances, students should contact Student Finance England as early as possible to confirm their status and understand what criteria apply to them. In some cases they may need additional time to meet residency requirements, and they should apply for pre-settled or settled status as soon as possible.

Yep, they’ll still need to pay for the amount they earnt above the threshold, adjusted to local currency. The government recently stated they will investigate this kind of situation more thoroughly in future. Look out for updates.