Can I afford to go to university in 2012?

[See Power Point notes pages for more detail]

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Tripling fees doesn't always mean tripling your costs● In 2012 all institutions will be allowed to

charge up to £6,000● Many will charge up to £9,000 providing

they make extra provisions for bursaries for poorer students

You don't need cash to go to university

●Tuition fees will be paid automatically for you●No repayments until April after graduation

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Earn under £21,000 and never repay

●Repaid through the income tax system●Repay 9% of everything you earn annually above £21,000●£21,000 threshold rises in line with average earnings

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30 year cut off for repayments

●Pay no more after 30 years have passed●Regardless of what you still owe

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Above inflation interest will be charged

●During study - RPI +3%●Earning less than £21,000 - RPI + inflation●Earning between £21,000 and £41,000 – interest rate gradually rises from RPI + inflation, up to maximum of RPI +3%●Earn over £41,000 – RPI +3%

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●Current – 9% of earnings over £15,000●New – threshold £21,000, meaning lower repayments●The following table will help to illustrate this

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Repayments £540 a year lower than now

Continued

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You will owe for longer, and may pay a lot more●Cost is spread over much longer period●Initially graduates have more in their pocket●Though later it's likely you'll have less as you'll still be repaying

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Part time students

●Fees of up to £4,750 (6,750 with bursaries)●No longer need to pay up front – eligible for SLC loans●No Maintenance Loans/grants●Criteria: first degree, studying 25%+ of full-time course

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Monthly repayments the same●Repay the same each month, whether £6,000 or £9,000 tuition fees & whether you take out the full maintenance loan or not●Important implications to how much you'll repay in total

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Loans also cover living costs

●Students can also take out maintenance loans●Pay for living costs – food, books, accommodation, travel●Usually 3 termly installments straight to your bank account

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How much?

●Amount of maintenance loan is assessed by your household income (“means-tested”) and whether you decide to live at home or away from home●All students are guaranteed up to 65% of total available●The remaining 35% is means tested

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Maintenance grants

●If the household income is below £25,000, the student gets the full grant of £3,250●Between £25,000 and £42,600, the grant is on a sliding scale●Grants do not have to be paid back

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Student loans DO NOT go on credit files

●Loan, credit card and mortgage providers only know you have a student loan if they choose to ask

●Impact on ability to get a mortgage in the future is limited

You may not be allowed to repay early

● May be penalised for repaying your student loan back early, especially as real interest is now being charged

Many people will never pay it all back

●It is estimated only 40% will ever pay back the full amount and these will only be the very top earners ●Likely many will repay the same on a 6,000 course as a 9,000

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Think of it like a tax not a loan

Why?●Repaid through the income tax system

●Only repay if you earn over a certain amount

●Amount repaid increases with earnings

●Does not go on credit files

●Debt collectors will not chase it

●Bigger borrowing doesn't increase repayments

●Many will repay for the majority of their working lives18

Financial support available(The following may be available as well as a maintenance grant)

Fee waiver – a reduction of tuition fees

Bursary – cash/gift in kind (grant/scholarship/living costs)

Scholarship – like bursary, often depends on academic ability

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Any questions?

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Useful links

www.studentfinance2012.com

www.studentfinance-yourfuture.direct.gov.uk

www.moneysavingexpert.com/students2012

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