Student Finance 2012: the facts, not the politics
June 15, 2011 11:01 AM
What every student & parent needs to know:
- The changes ONLY effect new September 2012 undergraduates and those thereafter. Existing students and 2011 starters stay on current system.
- You don't need the cash to go to university. Fees are automatically paid by a Student Loans Company loan. There are loans for living costs too.
- You only repay if earning over £21,000 & it wipes after 30 years. Full time students' repayments start the April after graduation, taken by employers like tax (so no debt collectors chase), at a rate of 9% of everything over £21,000. If there's debt after 30 years it disappears, so if you never earn over the threshold, you'll never repay a penny.
- Repayments are £540/year LOWER than now. Current graduates repay 9% of earnings above £15,000. The new threshold's £21,000 (which will rise with average earnings), so future grads will have more disposable income.
- You will owe money for LONGER and may pay a lot MORE. As you repay less each year, the original debt's bigger, and you pay higher interest, it'll take MUCH longer to repay the loan than now.
- Monthly repayments are the same, whether fees are £6,000 or £9,000. The course fee size doesn't impact monthly payments as they're set at 9% of earnings above £21,000 - though it could mean repaying more in total.
- Many will NEVER pay it all back. Many starting even on £25,000 salaries won't repay all owed within the 30 yrs meaning you repay for much of your working life. The slight silver lining is it means for many there's no increased total cost by doing a £9k course than a £6k course.
Information sourced from MoneySavingExpert.
For full help on living costs, grants, part-time fees, how this impacts mortgages, whether you should take a loan if you've got enough savings, links to help on the current system & more, see the new MoneySavingExper Student Finance 2012 Guide