The 10 things everybody should know about student fees in England
Tuition fees for first time undergraduates are automatically paid for you by the Student Loans Company. You only need to repay if you earn enough once you graduate.
Employers take repayments before paying you (like tax) simply reducing your pay packet. So no debt collectors come chasing.
You repay 9% of earnings above £21,000 in any tax year (and this will start rising with average earnings too). So earn £21,000 and you repay nothing, earn £31,000 and you repay £900 a year.
Thirty years after graduation the debt is wiped – you don’t have to pay any more – even if you’ve never repaid a penny.
Today’s graduates repay 9% of everything above £15,000. As this rises to £21,000 in the new system more cash remains in graduates’ pockets.
Graduates’ monthly repayments are based only on how much they earn, not how much they borrow, so monthly repayments are the same.
Combining the facts you pay less each year, but the original debt’s bigger and the interest rate is higher than for students now, it will take MUCH longer to repay the loan and you may repay more (see www.studentfinancecalc.com).
Students also get maintenance (living) loans on the same terms for food, books, accommodation and travel of up to £7,675 depending where you live and study and your parents’ income. For households with income under £42,600 some of the loan is replaced by a non-repayable grant.
Many won’t earn enough to repay in full before the 30 years ends; even some on starting salaries as high as £30,000 (which then rises) are unlikely to fully repay at £6,000 fees with the maximum maintenance loan. So there’d be no increase in the total amount repaid even if you took a £9,000 course.
Some are considering paying the course upfront to avoid the tuition fee loan. Worse, others are considering getting other types of lending to avoid it. Student loans are the only type of lending which you don’t repay if you’re not earning enough. Paying upfront could mean you repay £27,000 in fees to a uni which you never needed to repay. It’s worth thinking about this before taking the plunge.
This information was created by the Independent Taskforce on Student Finance Information.It was set up to help students in England understand the cost of their education.
It's headed by Martin Lewis of MoneySavingExpert.com, deputised by Wes Streeting, NUS President 2008-2010, and made up of groups including Universities UK, the NUS and UCAS (see full operations group). The Taskforce is independent of, but backed by, government and will set its own agenda.
Further information can be found at www.studentfinance2012.com
Download the free guide - You Can Afford To Go To Uni - PDF
