University is exciting, but figuring out how to pay for it? Not so much. Like many new students, if the words ‘tuition fee loan’ or ‘maintenance loan’ leave you feeling confused and slightly scared, don’t worry, you are not alone. Here is everything that you need to know about student finance before you head to campus.
For many students, applying for student finance is their first encounter with managing large sums of money independently. It can seem overwhelming and complex and first, but once you understand how the system operates, it becomes much less intimidating.
Whether you’re at University and still feeling uneasy about it, or joining later in the year and still deciding if university is the right path for you, understanding your financial options now will save you plenty of stress later.
What is Student Finance?
To put it simply, student finance is government funding that helps students to pay for university. In England, this usually comes in two parts:
Tuition Fee Loan- This covers the cost of your degree and is paid directly to your university, so you won’t ever see this money in your bank account
Maintenance Loan- This is the money that you will receive in your bank account to help pay for your day-to-day living, including rent, food, travel etc.
Think of your maintenance loan as your student budget- it needs to last until your next payment arrives.
How much money will I get?
Each individual will receive a different amount of maintenance loan, as everyone’s circumstance is different.
The amount that you’re entitled to is dependent on factors such as your household income, where you live while studying, and where your university is located. Students living away from home generally receive more financial support than students continuing to live at home.
It is worth planning ahead as for many students, the Maintenance Loan won’t cover the entirety of your expenses throughout the academic year.
The myth: ‘I’ll be drowning in debt!’
This is probably the biggest worry for students, but is also one of the biggest misconceptions. Yes, you’ll graduate with a student loan balance, but student finance doesn’t work like a credit card or bank loan.
You don’t start making repayments simply because you have finished university, but repayments only begin once you are earning over a certain threshold of your loan plan, and this is automatically deducted from your salary. For example, if you were a post-grad that started working this year, you would only start repaying your loan back when your income is over £480 a week, £2,083 a month, or £25,000 a year.
If your income drops below that threshold, your repayments automatically stop.
So for many students, student loan repayments become part of their monthly salary that is deducted from their payslip, rather than a monthly bill to worry about.
Will my maintenance loan cover everything?
For some students, yes. For most students, no. Accommodation is likely going to be your largest expense, particularly in popular cities- and food, travel and extra expenses on materials can quickly add up. This doesn’t mean that university is completely unaffordable, it just means that budgeting becomes an important life skill.
Simple ways to make your money last longer
Student life doesn’t mean surviving on pot noodles, or it doesn’t have to mean that!
A few smart habits can make an exceptional difference:
Budgeting weekly instead of spending all of your loan at once
Batch cooking meals to save money
Always ask if there is a student discount- you will be surprised with how many places offer one
Avoid impulse spending
Remember, even saving £10 here and there will add up over the academic year
Extra support
One mistake that many students make is assuming that maintenance loans are the only financial help available. Depending on your circumstances, you may also be eligible for-
University bursaries
Scholarships
Disabled Students Allowance (DSA)
Childcare support
It is always worth checking with your university, as they may offer support that you never knew existed.
Key things to remember:
Your tuition fees are paid by a loan directly to your university
Your maintenance loan covers living costs
You only repay your loan once you earn over a certain threshold for your loan plan
There is additional financial support available
Good budgeting and planning will make your university experience less stressful
After all, the more that you can understand and plan for your financial situation, the less time you will spend worrying about money, and more time can therefore be given to making the most of your university experience.