Student Loans - What is a Student Loan?

Any student in further education can apply for a student loan

A student loan is designed to help students pay for university and college tuition fees, books and living expenses.

How much you get depends on whether you are studying full-time or part-time and on your living circumstances.

There are two types of loans: a tuition fee loan for full-time and part-time students and a maintenance loan for full-time students only.

The student loan differs from other types of loans in that the interest rate is charged at a lower rate and the repayment is deferred until the student is employed and earning over a certain threshold.

Tuition Fee Loan

The tuition fee loan covers the cost of your tuition fees and is paid directly to your college or university.

Student
Type
Max Tuition Fee Loan
2012/13
New full-time students  £9,000
New full- time students at private university or college £6,300
New part-time students £6,750
New part-time students at private university or college £4,500

Maintenance Loan

The maintenance loan covers your living costs and is paid into your bank account at the start of each term. The amount you get depends on a number of factors: your family income, where you live, year of study and whether you are in receipt of a maintenance grant.

Student
Type
Max Maintenance Fee Loan
2012/13
You live at home £4,370
You live away from home and study o/s London £5,500
You live away from home and study in London £7,675
You spend a year of a UK course studying overseas £6,535

You can apply for 65% of the loan without submitting your household income information, however if you want to apply for the full loan amount then your family income will be taken into account. This is the amount your family earned before tax and national insurance in the previous tax year.

Repayments

Students who start their course after 1 September 2012 don’t start repaying their loan until they earn more than £21,000 a year. Then you repay 9 per cent of your income over £21,000.

For example if your salary is £25,000, that is £4,000 over the threshold. You pay 9 per cent of £4,000, which is £360. The threshold for students who started their course before September 2012 is £15,000.

If you are employed he repayments are taken automatically from payroll once your salary exceeds the threshold. For those who are self employed you will need to declare this on the self assessment form.