University Fees: Six Common Myths Busted
Amy studied at the University of Bristol and is our revision blog guru. She only graduated recently so understands the pressures of being a student better than most, and is here to share her wisdom so that you revise effectively, smash your exams, succeed at school and write cracking university and job applications.
University is a popular option for lots of students after they’re done with college or sixth form, and for good reason. Uni offers an amazing opportunity to further your knowledge in a particular subject, start working towards a particular career, and (for many) to live away from home and experience true independence for the first time.
Unfortunately though, many potential university students and their families are deterred by the heavy fees attached. It’s unsurprising that, even if university is something you’d love to do, you might feel put off by the idea of student debt and expensive living costs.
While this is understandable (given that UK university fees currently stand at £9,250 per year) the overall cost doesn’t have to stand in your way, as there are many ways of ensuring that whatever your financial circumstances, you can get a degree and live comfortably and happily. This week, Save My Exams are busting some of the myths surrounding university fees.
1. You’ll have to pay your fees upfront
Not quite true. Tuition fees are handled by loans, and everyone is entitled to one. Registering with the student loans service is a fairly long but straightforward process; and the student loans company will cover all the costs of your tuition for you until you’re earning enough to start paying them back.
Head to Student Finance England for more information.
2. Your loans will cover all of your costs and expenses
Also not quite true — you will incur living costs while at uni, and these will vary depending on where you go (London, for example, is renowned for being a particularly expensive place to live).
A maintenance loan is available through the student finance service, in addition to a tuition fee loan. The amount you receive is judged depending on things like your parents’ income, whether you have ‘dependents’ (such as younger siblings or elderly relatives who depend on you or your parents financially), whether you go to uni in London or elsewhere, and more.
Some people are lucky enough to benefit from additional monetary support from parents, and if this is you then you’re lucky! Having said that, not everyone gets such support; and it’s totally possible to get by without any extra help with a bit of careful budgeting.
Figures show that over 70% of students feel that their maintenance loans don’t cover all their costs, with many taking on part time work whilst studying. This in itself is a good way to get some work experience whilst at uni. Also, many universities offer jobs within the institution (such as ‘student ambassador’ roles) which are flexible to fit in around studies, not to mention well paid – so keep an eye out!
3. The maintenance loan is the only form of living cost support
A range of grants and bursaries (that don’t require repaying) are available to students who need them. Students from lower income backgrounds, those with disabilities in need of extra support, or students studying particular courses can be offered support along these lines. Those with disabilities and learning difficulties are also entitled to financial support form the Disabled Students Allowance (DSA). They can can either give you (or help fund) equipment and sessions to help you out.
This support varies from uni to uni, so get in touch with the universities you want to attend to see what you’re entitled to.
4. A student overdraft is effectively free money
Most banks also offer special student bank accounts with interest free overdrafts, and a few have extra perks on top of that. For example, Santander give a free young person’s railcard to anybody who opens a student bank account with them, which saves students lots of money on rail travel whilst they’re studying (and they usually cost £60). Other banks offer other benefits like Tastecards, so it’s worth doing some research!
The overdrafts can be a great help, but they can also be dangerous and should be viewed as a backup facility rather than real money for you to spend freely. You’ll have to pay back your overdraft eventually – it’s not actually free money, and if you hit your overdraft limit you will be charged per day. If you can afford to stay out of your overdraft, you definitely should.
Having said that, if you’re not recieving any extra financial support and pay for everything yourself, the zero interest policy and deep limits (Santander’s overdraft starts at £1,500) mean that student overdrafts are a great form of extra support to help you pay your way through uni.
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5. You’ll have to start repaying your loans as soon as you finish university
If you do study for a degree, there’s no denying you’ll come out of it with a lot of debt. That being said, student debt doesn’t work in the way that ‘regular’ debt does. It doesn’t count against your credit score and it won’t get in the way of getting a mortgage in the future. You only start repaying your student loans once you earn a certain amount of money, which is set to become £25,725 per annum from April this year (which is more than the average starting salary).
At that stage, 9% of the amount you earn over £25,725 will be taken from your monthly wage packet. This is to say, for example, if you were to be earning £26,725 (£1,000 over the threshold), the overall takings would be 9% of that £1,000 (£90), rather than 9% of your £26,725 overall. In short – it’s a small amount that shouldn’t concern you. When you pay it back you’ll be earning enough to make the repayments feel negligible in comparison to your real earnings.
6. You’ll be paying back your loan for the rest of your life
Whether you’re earning enough money to pay back your loan from the second you graduate, or stay below the threshold and never have to repay a penny, any money outstanding after 30 years is wiped off entirely – no matter how much of the balance remains.
It’s widely accepted that the majority of people will never fully pay back their student debt. Even though 30 years is quite a long time, the fact that it doesn’t start hitting your pay packet until you’re earning nearly £26,000 per year means your student debt never has to be a major drain on your finances.