The first question you may asking yourself as a parent is 'can I afford to send my child to university?' With fees seemingly rising year on year, you might be forgiven for thinking that it is completely out of your price range. However, this is not necessarily the case, if you don’t want to, or cannot, you do not have to contribute at all to the cost of your son or daughter’s higher education.
Students are eligible for a range of loans, designed to cover the cost of university and ensure that it is a viable option for people of all income brackets. They can take out a tuition loan, which is fixed and covers all tuition fees, however high they are. There is also a maintenance loan, which is designed to help with living expenses and varies in amount depending on where your son or daughter lives, where they study and what your family income is. In England, every student is eligible for a loan of at least £3,410, this figure increases to around £12,010 for those with a household income of less than £25,000.
As of this year, the government has scrapped their maintenance grant scheme, which used to give poorer students part of their loan as a grant that did not need to be paid back. This grant is now given as a bigger loan, however, you need not worry that your son or daughter will be drowning in debt by the time they leave university. University debt is more like a tax than anything else - students only have to start repaying it once they earn over £26,575 a year and it comes out of their paycheck automatically every month, just like tax. Furthermore, if they lose their job or their salary drops below £26,575, their repayments will stop automatically.
Even then, you need not worry that this is debt that will plague them for the rest of their lives. After 30 years, any remaining student loan debt is wiped off. This means that someone earning the UK average salary of £30,800 over their lifetime, whose debt originally amounted to the average £40,280, will only pay back £4,070 and have £36,210 wiped off. If you want an estimation of how much your son or daughter will pay back, Money Saving Expert provides a nifty student loan repayment calculator.
Furthermore, the interest rate for a student loan tends to be much cheaper than a regular bank loan. Throughout study and the repayment period, interest rates are at RPI (Retail Price Index) + 3%, unless the student in question is earning under £26,575. In this case the rate would be equal to RPI.
In addition to this, there are a number of university tuition fee schemes and financial support initiatives for students across the United Kingdom. For more information please click on the country you reside in (not the country you are attending university in!)
Student Finance England offers a number of loans and grants including:
- Tuition Fee Loan of up to £9,250, paid directly to the university.
- Maintenance Loan of up to £12,010 depending on circumstances, paid triannually into a designated bank account. For a breakdown of current allowances see the Student Finance website.
- Other Support- There is additional support available to disabled students, carers, care leavers, students with young children and those studying certain courses such as NHS degrees, social work or teaching.
- University Support- Many universities run scholarship and bursary schemes for exceptional students or those from poorer backgrounds. You can find details of this in the finance section in our UK Universities section.
You need to apply online for any government loans and grants by 22nd May 2021.