From September 2012, universities will start charging students more for their studies, up to £9,000 a year for full-time students and £6,750 for part-time students.
It's important that you know exactly what the changes mean to you so you can weigh up the costs of university, know how the loans system works and importantly, how much you'll be paying back once you start earning.
However, these changes only apply to students who are going to university from September 2012 and are doing their first undergraduate degree. Students already doing a degree will not fall under the new system.
The following points are important to know:
- If you decide to go to university, you won't have to pay anything upfront. You can take student loans to cover your fee costs and living costs for every year of your degree and you won't have to pay anything back until you are earning £21,000 or more.
- No matter how much you take out in loans, under the new system, you'll only pay back the same amount every month - nine per cent of anything you earn above £21,000. This will be taken direct from your pay packet every month (see table below for approximate monthly repayments).
- Whether you do a £6,000 course or a £9,000 course, you'll pay back the same amount every month - nine per cent of anything you earn above £21,000.
- If you decide to take a career break or are made unemployed, your repayments will simply stop - no questions asked. You won't need to explain or contact anybody and no one will ask you for any money. Your repayments will only start again when you start earning over £21,000. If you have not repaid your loan after 30 years, the remaining balance will be written off. This will happen automatically. Also your family will never be liable to pay for your loan, no matter what happens.
- Any loans you take out to cover fees and living costs, will be paid off in one lump sum straight out of your pay packet. You'll never pay more than nine per cent of what you earn above £21,000 no matter how much financial help you take.
- Having a student loan is unlikely to affect your chance to get a mortgage or a credit card or any other financial help in the future. A student loan does not count against your credit rating. You may have to declare on some application forms that you have a student loan, but it is not seen as a barrier to obtaining further financial help.
| Salary |
Amount of salary from which 9% will be deducted |
Monthly repayments |
| £20,000 |
£0 |
£0 |
| £25,000 |
£4,000 |
£30 |
| £30,000 |
£9,000 |
£67.50 |
| £35,000 |
£14,000 |
£105.00 |
| £40,000 |
£19,000 |
£142.50 |
| £45,000 |
£24,000 |
£180.00 |
| £50,000 |
£29,000 |
£217.50 |
| £55,000 |
£34,000 |
£255.00 |
| £60,000 |
£39,000 |
£292.50 |