St Peter’s
RC Sixth Form
Higher Education: Student Loans
What
is a Student Loan?
The majority of UK students now finance their university education by
taking out a student loan from a government organisation, the Student
Loans Company (SLC).
The interest rates payable on student loans are lower than for most other
sorts of loans, and so it is a very cheap way of borrowing money. It will
be linked to inflation, so that in real terms, graduates will not have
to repay more than they borrow.
The loan has to be paid back when you have finished your course and have
started to earn over a certain amount of income.
Will I be eligible for a
Student Loan?
To be able to take out a student loan (and get help with tuition fees),
you and your chosen university course will have to fulfil certain conditions:
- Are you ‘ordinarily resident’ in the UK (usually, have you lived in the UK for at least three years prior to your course apart from holidays or travel)?
- Are you under 50?
- Are you aged between 50 and 54 but intend to work after you get your degree?
- Does your course last for at least one academic year?
Note that:
- Loans are available for students studying on a full-time degree or a diploma in a higher education course.
- Loans can be made to any student up to the age of 50 (or 54 if the mature student of this age intends to work after qualification).
- Loans are for UK students only.
- Part-time students on low incomes will be entitled to apply for a student loan of up to £500. (back to top)
How much can I get?
The maximum amount of loan that you can get depends on:
- Where you live and study.
- What course you are studying.
- Which year of your course you are on.
- How much you and your family are expected to contribute.
- The length of your academic year. (back to top)
How am I assessed for student loan ?
Parents’ Residual
Income
The LEA assesses your parents’ residual income. It does this by
starting with your parents’ gross (total) income (a) and subtracting
certain allowances(b) such as:-
- A dependent adult who is not husband or wife – and the dependant’s own income is less than £2,415.
- Interest payments, dependants’ pension schemes, life assurance and superannuation payments that qualify for tax relief.
Subtracting (a) from (b) gives you the residual income.
The residual income assessment is usually based on the previous financial
year (from April 6th to April 5th), but if there is a big difference between
last year’s income and this year’s, you can ask the LEA to
base the assessment on the current year.
(back to top)
Parents’ Contributions
Having worked out the residual income, the LEA then applies a scale for
parental contributions. Any contributions your parents are expected to
make will first go towards the tuition fees, then towards your loan, and
then towards any supplementary grants to which you are entitled.
One way of looking at the amount your parents will be expected to ‘pay’
is to say that they will be expected to contribute:
| If your parents’ residual income is: | Their contributionwill be roughly: |
| Below £20,970 | No contribution. |
| £20,970 | £45 |
| £23,000 | £258 |
| £31,000 | £1,100 |
| £43,000 | £2,363 |
| £45,000 | £2,574 |
This is calculated as an extra £1 for every £9.50 of residual
income. The maximum contribution is £6,910.
However, the actual parental contribution is likely to be less than this
because the contribution cannot be more than the £1,125 maximum
fee contribution plus the maximum level of means-tested maintenance support
(loan + supplementary grant) that you are entitled to.
If your parents have other dependent children, their contribution will
be reduced by £83 for each child. If you have a brother or sister
who is at university or college and is receiving student support from
the LEA, the parental contribution will be worked out, and probably reduced,
to reflect this. The contribution would usually be shared out equally
between you and your sibling.
(back to top)
Your Own Income
Any income you yourself might have can also affect tuition fee contributions
and your student loan entitlement. Some of your income will not be taken
into account. This includes:
- Any income from casual or part-time jobs during your course. This includes work done during the holidays, in the evenings or at weekends.
- The first £4,000 from any scholarship, sponsorship or similar award.
- The first £1,100 from your permanent employers, if they release you, for example on part or full pay, to be on the course.
- Any payment made under the Teacher Training Initiative.
- Any trust income, depending on your circumstances. Your LEA will give you more details.
- The first £3,420 of any allowances or benefit paid because of old age, retirement, bereavement or military or other public service.
- Any pension, allowance or other benefit paid because of a disability, and any war widow’s or war widower’s pension.
- Most social security payments or other similar payments which are not taxed. Your LEA can give you more advice.
- Maintenance payments made to you for a child, arranged through any agreement or by a court. However, they will be taken into account when assessing whether you are eligible for dependant’s allowance.
- Maintenance payments by you for a child or former husband, wife or partner arranged through any agreement or by a court.
- For a student who is independent of his or her parents and where no husband or wife or partner’s contribution applies, the first £7.500 of income of any kind.
- Any educational payments such as student loans, payments from your college’s access and hardship funds, or payments under the Socrates-Erasmus programme.
- The first £900 from any other source.
If you are aged 25 and over (whether or not you have dependants) or are
classed as an independent student, and no contribution is due from your
husband or wife or partner, your LEA will ignore the first £7.500
of income. However, in that case, they will not ignore the first £3,420
of any allowance or benefit paid because of old age, retirement, bereavement
or military or other public service. The first £900 of income from
any other sources (see above) will not be ignored either. If you think
that you will get income under these categories above the levels shown,
your LEA will reduce your support pound for pound.
Your LEA will work out how much, if anything, you might be expected to
contribute at the same time as it works out your parents’ contribution.
(back to top)
How
do I apply for a student loan?
Applications for tuition fees and loans go together. Even if you don’t
think you would be offered any help with fees, you must still apply to
be assessed for a loan. If you live in England or Wales, you need to apply
to your LEA. If your parents no longer live together, the LEA will assess
the income of whichever parent they consider to be more ‘appropriate’.
If you have dependants, you can get extra allowances. The income of a
dependant (such as a pension) is taken into account when the assessment
is made.
The maximum amount for a 52 week year is: £2,280 for a husband or
wife or partner or another adult member of your family who depends on
you financially. (back to top)
Find
out more about Student Loans:
Essential reading is:
‘Financial Support for Higher Education Students’
– guide for 2003/2004, published by the DFES.
Free information line for copies: 0800 731 9133.
Quote ref: S/FSHE/V3.
Write to the:
Student Loans Company,
100 Bothwell St., Glasgow.
G2 7JD
for a free leaflet, updated each year,
- or ring the helpline: 0800 405 010.
Higher Education pages updated 23rdJune 2003