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From September 2016, you will be able to access a government-backed non means-tested student loan of up to £10,000 to help pay for your Master’s degree.
A Master’s course currently costs on average £8,000 and funding has traditionally been achieved through commercial loans, one-off scholarships, grants and sponsorships, and occasionally charitable help.
However, following the Chancellor’s November 2015 spending review this new loans system has been put in place to help make courses more accessible for those with limited funding options.
What courses are eligible for funding?
All full-time taught and research Master’s programmes of two years or less are covered, in all subjects, disciplines and qualifications. All part-time and distance learning courses are also eligible in the same way, providing that you study them at at least 50% of the intensity of the original course and that they last no longer than four years.
This means that MA, MSc, MBA and MRes programmes are all eligible, however PhDs aren’t covered - there are currently plans for a separate loans system for Doctoral students, however these are unlikely to be available until 2017/18 at the earliest.
Postgraduate Certificates (PgCert) and Postgraduate Diplomas (PgDip) aren’t eligible, as well as the specific Postgraduate Certificate in Education (PGCE) as financial support for this is available through the Department of Education.
Who is eligible for a Master’s loan?
You are eligible if:
- you are under 60 when you start the course;
- you are studying at a university with degree awarding powers in England, Scotland, Wales or Northern Ireland;
- you have lived in England for at least three years for a reason other than study, and are from England, Wales, Scotland, Northern Ireland or any EU country in the EEA;
- you have not undertaken a Master’s or PhD before.
How would I receive a loan?
As loans are worth a maximum of £10,000 and the average Master’s costs approximately £8,000, the loans cover the fees for most courses.
The loan is paid directly to you by the Student Loans Company in three installments per year and you may receive up to £10,000 per year if you are studying on a one-year full time programme or up to £5,000 per year on a two-year full-time programme. If your programme is part-time you can receive up to £5,000 in each of your first two years.
Payments start when your attendance is confirmed by the university, and will stop if you leave the programme or transfer onto a course that isn’t eligible. If you leave early and fail to complete the course you will still have to pay back the money you owe.
As the loan is considered to be a contribution towards the costs of postgraduate study (not specifically for either fees or maintenance), and is paid directly to you, the can spend it on tuition fees but also living costs and other expenses you might incur. You can obtain the loan alongside other grants and scholarships, so shop around for an alternative or additional funding option before you take out the loan.
How do I repay back my loan?
In line with the undergraduate loans system, repayments start when you are earning over £21,000 per year at a rate of 6% on earnings over the £21,000 threshold, and will be paid on top of your undergraduate loan, if you have one. .
Repayments for any student will not begin until 2019, and after that you will repay the loan from the April after you graduate.
Loans are subject to interest rates at RPI + 3% and interest will start accruing as soon as the first payment is made into your bank account by the Student Loans Company.
All student debt will be cancelled after 30 years.
How do I apply for a loan?
The application process student loans haven't yet been finalised, but it will be likely that applications will be made online through Student Finance England. It is expected that you will be able to apply for loans from June/July 2016.