Congratulations, you’ve received the A-level results you wanted and worked so hard for. Now you’re thinking about the exciting university years that lie ahead of you, hopefully on your first choice of course. The next question is how the course and your accommodation is going to be funded. Like most students, you are probably going to need some extra support to fund your fees, living accommodation and student life even if you’re lucky enough to have weekend or holiday work.
What is a student loan?
Student loans are specifically designed for students heading off to undergraduate, and in some cases, postgraduate life. They help fund tuition fees, books, supplies and living expenses and differ from other forms of credit in two main ways. Interest rates are substantially lower and repayment is deferred until a certain level of income is achieved. In the United Kingdom, these loans are mainly underwritten by the Student Loans Company with interest accumulating as soon as you receive a payment. These repayments are collected through the tax system, with the amount based on income levels. Student loans remain the sole responsibility of the recipient and are cancelled should the borrower die or is permanently unable to work. In some parts of the UK, current legislation dictates that the loan is also cancelled after 30 years or when you reach a certain age.
How do student loans work?
The Student Loans Company will ask you to fill in a series of forms which allow them to review your individual circumstances, taking into account yours and your parents’ incomes. The cost of tuition fees and living accommodation at different universities will also be a factor. Your tuition fee will be paid directly to your university or college while the maintenance part of your loan is paid into your bank account. In England, Wales and Northern Ireland this is paid termly, meaning you have a fast learning curve about budgeting. In Scotland, payments are monthly. If you’re a full-time student with dependents, whether children or adults, these will probably entitle you to a higher loan.
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