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Congratulations if you've just finished your A-levels and congratuations to those who picked up their IB results the other day! Good luck to everyone else who's waiting patiently and anxiously for August to come around. 

If you are looking forward to attending university in the Autumn, the vast majority of you will be paying for it using the Government's student loan scheme, as three years' tuition fees alone costs £21,750. The deadline dates have passed, however, as the forms are a total minefield you may still be asking yourself how it works. 

What is a student loan?

A student loan is a loan (a lump sum of money) given to you by the Government when to help you pay for your time at university. There's one part that pays for your tuition fees and another part which pays for your living costs, such as accommodation, transport, and studying equipment, which is known as a maintenance loan. There's also a maintenance grant for students whose parents earn under a certain threshold and this does not need to be paid back. 

How do I receive my student loan?

How much can I borrow?

How much do I have to pay back?

How does interest work? 

Once you earn more than £45,000 or above the interest rate is fixed at RPI +3%. 

How long will it take to pay back my loan?

How long it will take you to pay back your loan depends on how much you are earning and how much you borrow. The same Money Saving Expert calculator shows you approximately how long it will take you to pay back your loan and whether it will be written off after 30 years.  

Can I pay back my loan early?

If you've received a windfall, perhaps through inheritance or a bonus at work, it is possible to pay off your loan early and there are no penalties for doing so. However, most experts, including Martin Lewis recommends not doing this. This is because if you are trying to save money you'll earn more interest by putting your money into an ISA than the interest you're gaining on your student loan so you'll be better off in the long run, and this is especially true of someone on a low wage. Additionally, if you are looking to take out a further loan, such as a mortgage in paying off your student loan you'll probably have to take out a bigger mortgage. Comercial loans come with higher rates of interest, so overall you'll pay more money. 

Top photograph: CC BY-2.0