The financial worries about university can put many parents off encouraging their child to apply. Many parents have serious and valid concerns about the cost of university and the impact it can have both on their child and on themselves. Before making a judgement about whether or not university is right for your child, have a look at the following information so that you feel properly informed about the system and its many myths and misconceptions.

VIDEO: STUDENT LOAN ADVICE FOR PARENTS

HOW IS IT PAID FOR?

Nothing is paid up front. Money is made available to students to cover the costs in two ways: Tuition and living cost (a.k.a. maintenance) loans are given to the student by the government and are paid back only when the student starts earning over £21,000. To support students from low household income families, other sources of money are available in the form of maintenance grants, bursaries, fee waivers and scholarships. This money is non-repayable.

The tuition loan is there to cover the university’s costs. Most universities are currently charging £9000. This is paid directly to the university from the Student Loans Company and so your child doesn’t have to handle any of the money. If your child wants to study healthcare courses like Nursing or Midwifery, the NHS will often pay your child’s tuition fees in full. Click here for more information.

The living cost or maintenance loan is there to cover the costs of everything else: rent, food, bills, books, travel etc. The amount your child gets depends in part on household income, whether they study in London, and whether they live at home while studying.

Bursaries, Fee Waivers and Scholarships are additional sums of money which have been made available to support students, usually from low-income households. Each university has their own criteria and system for allocating this money. See each university’s individual website for details.

REPAYMENTS

Although the government has increased tuition fees, it has also made the repayments system a lot more manageable for your child once they leave university. Repayments only start once they are earning more than £21,000 and continue for up to 30 years after graduation. The amount repaid is 9% of any income above the £21,000 threshold per year.

If your child’s income drops below £21,000 the repayments stall until they reach £21,000 again. This continues until the total amount is paid off or until 30 years have elapsed, whichever comes first.

Many students will never pay off their student loan in full over this 30 year period. It is more helpful, therefore, to think of repayments not in terms of a sum of debt but as a 30 year tax. Each payment is only a small proportion of your child’s income and gets taken off their paycheque exactly like tax does. There is very little relationship between the sum of debt and its measurable day-to-day cost to your child.

STUDENT LOAN VS NORMAL LOAN

A student loan is very different to a normal loan. Normal loans have higher levels of interest, debt collectors, personally managed repayment structures, and a set amount of money to be paid off. They can also affect credit ratings and mortgage applications. Student loans have comparatively low interest, no debt collectors, automatic repayment through your  paycheque, don’t affect credit ratings or mortgages and have no set amount of money but rather a set amount of time during which to repay.

OTHER SOURCES OF NON-REPAYABLE FINANCIAL SUPPORT

As part of the changes introduced by the government in 2012, financial support has been made available to students from low-income families. This means that university is actually now a lot more affordable for some students thanks to a range of extra sources of non-repayable money. 

SCHOLARSHIPS AND BURSARIES

Students from lower income families may benefit from university bursary schemes, to which the government is partly contributing via the National Scholarships Programme. Universities offer different scholarships and bursaries. Oxford Brookes, for instance, offers its Financial Support Package. Please see other individual university websites for details on how they allocate these funds.

EXTERNAL GRANTS AND SCHOLARSHIPS

There may also be various charitable organisations which offer grants dependant on your child’s circumstances, location or course. Search online or browse these grant websites Unigrants, Money Saving Expert Education Grants and turn2us. It doesn’t take long to investigate, and if you do, your child might be thousands of pounds better off!

FEE WAIVERS

Universities may be able to offer fee waivers (a reduction in tuition fees) to students. These often depend on their household income. Please see individual university websites for details.

FURTHER GOVERNMENT SUPPORT

Additional funding is available for students with physical, mental and learning difficulties, students with children, and students with adult dependants. This funding does not need to be paid back.

The financial worries about university can put many parents off encouraging their child to apply. Many parents have serious and valid concerns about the cost of university and the impact it can have both on their child and on themselves. Before making a judgement about whether or not university is right for your child, have a look at the following information so that you feel properly informed about the system and its many myths and misconceptions.

VIDEO: STUDENT LOAN ADVICE FOR PARENTS

HOW IS IT PAID FOR?

Nothing is paid up front. Money is made available to students to cover the costs in two ways: Tuition and living cost (a.k.a. maintenance) loans are given to the student by the government and are paid back only when the student starts earning over £21,000. To support students from low household income families, other sources of money are available in the form of maintenance grants, bursaries, fee waivers and scholarships. This money is non-repayable.

The tuition loan is there to cover the university’s costs. Most universities are currently charging £9000. This is paid directly to the university from the Student Loans Company and so your child doesn’t have to handle any of the money. If your child wants to study healthcare courses like Nursing or Midwifery, the NHS will often pay your child’s tuition fees in full. Click here for more information.

The living cost or maintenance loan is there to cover the costs of everything else: rent, food, bills, books, travel etc. The amount your child gets depends in part on household income, whether they study in London, and whether they live at home while studying.

Bursaries, Fee Waivers and Scholarships are additional sums of money which have been made available to support students, usually from low-income households. Each university has their own criteria and system for allocating this money. See each university’s individual website for details.

REPAYMENTS

Although the government has increased tuition fees, it has also made the repayments system a lot more manageable for your child once they leave university. Repayments only start once they are earning more than £21,000 and continue for up to 30 years after graduation. The amount repaid is 9% of any income above the £21,000 threshold per year.

If your child’s income drops below £21,000 the repayments stall until they reach £21,000 again. This continues until the total amount is paid off or until 30 years have elapsed, whichever comes first.

Many students will never pay off their student loan in full over this 30 year period. It is more helpful, therefore, to think of repayments not in terms of a sum of debt but as a 30 year tax. Each payment is only a small proportion of your child’s income and gets taken off their paycheque exactly like tax does. There is very little relationship between the sum of debt and its measurable day-to-day cost to your child.

STUDENT LOAN VS NORMAL LOAN

A student loan is very different to a normal loan. Normal loans have higher levels of interest, debt collectors, personally managed repayment structures, and a set amount of money to be paid off. They can also affect credit ratings and mortgage applications. Student loans have comparatively low interest, no debt collectors, automatic repayment through your  paycheque, don’t affect credit ratings or mortgages and have no set amount of money but rather a set amount of time during which to repay.

OTHER SOURCES OF NON-REPAYABLE FINANCIAL SUPPORT

As part of the changes introduced by the government in 2012, financial support has been made available to students from low-income families. This means that university is actually now a lot more affordable for some students thanks to a range of extra sources of non-repayable money. 

SCHOLARSHIPS AND BURSARIES

Students from lower income families may benefit from university bursary schemes, to which the government is partly contributing via the National Scholarships Programme. Universities offer different scholarships and bursaries. Oxford Brookes, for instance, offers its Financial Support Package. Please see other individual university websites for details on how they allocate these funds.

EXTERNAL GRANTS AND SCHOLARSHIPS

There may also be various charitable organisations which offer grants dependant on your child’s circumstances, location or course. Search online or browse these grant websites Unigrants, Money Saving Expert Education Grants and turn2us. It doesn’t take long to investigate, and if you do, your child might be thousands of pounds better off!

FEE WAIVERS

Universities may be able to offer fee waivers (a reduction in tuition fees) to students. These often depend on their household income. Please see individual university websites for details.

FURTHER GOVERNMENT SUPPORT

Additional funding is available for students with physical, mental and learning difficulties, students with children, and students with adult dependants. This funding does not need to be paid back.