Student loans and finance

June, 2016

Before applying to university you need to find out how much you’ll have to pay in tuition fees and living costs, and what financial support is available to help you

Tuition fees

Universities charge tuition fees to cover the costs of running your course. In England, universities can currently charge a maximum of £9,000 per year for undergraduate tuition fees for UK and European Union (EU) students.

The government plans to allow English universities to raise tuition fees above this level from autumn 2017. Under the proposals, only institutions that perform well in a new teaching quality assessment will be allowed to increase their fees.

Scottish universities do not charge tuition fees to students from Scotland or elsewhere in the EU. But students from England, Wales and Northern Ireland must pay up to a maximum of £9,000 per year.

If you study in Wales and are from Wales or the EU, you will be charged up to £3,900 per year, whereas English, Scottish and Northern Irish students pay up to £9,000.

Similarly, universities in Northern Ireland can charge a maximum of £3,925 per year to Northern Irish and EU students, and up to £9,000 to English, Scottish and Welsh students.

In all parts of the UK, fees for non-EU international students are set on a variable scale and are usually higher. University websites will display the most up-to-date fee information.

Living costs

Your most significant living cost is likely to be your rent, whether you decide to live in halls of residence or private rented housing. Therefore, you should research your student accommodation options thoroughly.

You'll need to budget for any bills that are not included in your rent (such as internet access) as well as essentials such as food. Set aside money for insurance, clothes, toiletries, course materials, printing, transport and social activities too.

There are many student exemptions and discounts that you can take advantage of. For example, a 16-25 Railcard will give you a third off rail fares for £30 a year, while for a small cost an NUS Extra card provides access to a variety of useful savings.

If you live in a student house and everyone is studying full time, you don't have to pay any council tax. Apply for this exemption by phoning your local council or through its website.

When you’re working out your weekly or monthly budget, don't forget that your living costs will be somewhat higher if you are studying in London compared with elsewhere in the UK.

Student loans

There is support available to help you with these costs, in the form of repayable student loans provided by the government. These are split into two distinct parts: tuition fee loans and maintenance loans.

Tuition fee loans of up to £9,000 a year cover your course fees. You don't receive this money; it is paid directly to the university running your course. If you are studying part time, you may be able to get a tuition fee loan of up to £6,750.

Prior to September 2016, students from families with an annual income of £25,000 or less would be eligible to apply for a non-repayable maintenance grant to help with their living costs. However, as this support is no longer available, new students starting from the 2016/17 academic year will need to apply for a means tested maintenance loan instead.

Maintenance loans are paid into your own bank account at regular intervals, usually at the start of each term.

The level of maintenance loan you will receive depends on your household income and where you plan to study. For the 2016/17 academic year, the maximum available is £6,904 if you continue to live at home, £8,200 if you live away from home outside London, and £10,702 if you live away from home in London.

There is no upper age limit on student loans, but in most cases you cannot apply if you have studied at undergraduate level before. For full details of who is eligible for student finance, see GOV.UK.

Interest is charged on student loans at retail price inflation (RPI) plus 3%. However, you do not have to repay these loans until you graduate and are earning more than £21,000 a year. You will then make repayments at a rate of 9% of your income over the threshold. If you are employed, the appropriate amount will be automatically deducted from your salary.

Apply for your loan in the spring before you start university by going to Student Finance England. You don't need to have a confirmed offer of a place on a course before applying. The final deadline for applications is nine months after your course start date.

If you live in Scotland, Wales or Northern Ireland the process is slightly different and you should apply through the following bodies:

Hardship funds

Additional support is available for: students with children or dependent adults; disabled students; medical, social work and teacher training students; students studying abroad. For further details and to check your eligibility, see GOV.UK.

Help is also available from your university. Non-repayable bursaries, scholarships and awards are available for students who would otherwise be unable to afford to study at this level. Contact your university to find out what’s on offer, whether you’re eligible and how to apply.

Meanwhile, if you find yourself in financial difficulty after your course has started, universities may be able to provide money from their hardship funds to support you. Apply through your university's support services, which will decide whether you qualify.

Student bank accounts

Several high street banks offer accounts aimed specifically at students and it’s a good idea to open one of these before you start your course.

When you're deciding which bank to choose, don't just pick the one with the best free gift. Instead, focus on factors such as the size of the fee-free overdraft facility, as this will be a great help when money is tight.

What's available changes every year, so browse the websites of the major high street banks to find the best option, or use comparison websites to help you reach a decision.