University Tuition Fees and Student Loans

If your child is thinking about going into higher education, they are making a great investment for their future. However, as parents, it is worth knowing how much the course is going to cost and all the associated expenses, such as books, travel, rent if living away from home, etc. With the majority of university tuition fees going up to £9,000 for the 2012/13 term, the costs of student life is now more expensive than ever before.

There are essentially three main sources of financial support for students. These are student loans, government grants and university and college bursaries. Of these three, student loans need to be paid back once your child has graduated and begun employment, but bursaries and grants are not required to be repaid.

Student Loans

There are two types of student loan, which cover tuition fees and maintenance respectively. Students can apply for these loans regardless of their household income.

Tuition Fees Loans covers the fees charged for your child's course each year and are paid directly to the university or college.

The maximum tuition fee a university or college can charge is:

• £3,375 for 2011/12
• £9,000 for 2012/13

The maximum amount available to students for Maintenance Loans in 2011/12 is:

• £3,838 if you’re living at home
• £4,950 if you’re living away from home outside London
• £6,928 if you’re living away from home in London

The maximum amount available to students for Maintenance Loans in 2012/13 is:

• £4,375 if you're living at home
• £5,500 if you’re living away from home outside London
• £7,675 if you’re living away from home in London

A Maintenance Loan is designed to cover other expenses such as living costs. Neither of these loans need to be paid back until your child is earning more than £15,000 per year if they start their course before September 2012, or over £21,000 a year if they start their course in September 2012 or later.

However, interest will accumulate on the loan, starting on the date when the loan is paid out to the student. Repayments are calculated at a rate of 9% of your child’s income over £15,000 before September 2012, or £21,000 after this date. For example, if a graduate is paid £18,000 per annum in their first job, they would pay back their student finance at a rate of £5.19 per week.

Who Qualifies For Maintenance Grants?

Maintenance grants are available to new full-time students if your household income is £50,020 or less in 2011/12 or £42,600 or less in 2012/13. Those who are not eligible for the full grant, which is worth up to £2,906 per annum for 2011/12 or £3,250 for 2012/13, may qualify for partial grants. You’ll receive the maximum Maintenance Grant if your household income is under £25,000.

In some circumstances, your child may be able to receive a ‘Special Support Grant’, which in effect allows students on lower incomes to be able to claim a higher Maintenance Loan than normal. You don’t have to pay back Maintenance Grants.

Who Qualifies For Bursaries?

Bursaries are available to a wide range of students. For example, students who are paying the maximum tuition fees, are receiving the full Maintenance or Special Support Grant and who are studying in England in 2011/12 automatically qualify for £338, although the actual amount a student receives could be substantially higher than this. Bursaries aren’t always paid in money – they could be given to students by way of reduced rental costs in student accommodation or free equipment.

A new £150m National Scholarship Programme to help students from lower income families will be introduced for the 2012/13 term, but details are still to be finalised by the government.

What This Help Means For Parents

If your child is considered a ‘dependant’, then your finances may be assessed in order to ascertain how much financial help they should receive. You should encourage your child to make their applications early – they do not have to wait for their results or to be offered a place. If they make their applications late, they may not have the funds in time for the beginning of term.

Other Funding

It is also possible to obtain financial help for students who have special circumstances. There is financial help for disabled students, a childcare grant for students who have children, grants for those who have adult dependants, and hardship grants, known as the ‘Access to Learning Fund.’

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