Learning to Love the Student Loan
What are the financial realities of getting a degree?
We read in The Guardian today about changes to the way you fund you study. Maintenance grants have been changed to loans, tuition fees may be on the rise. It looks like university is getting more expensive.
And it does look scary when presented like that.
A single year of study adds up to £17,200 (£9,000 in tuition and £8,200 in maintenance loan), over the average 3 year course you’ll leave with £51,600 in student loans.
Eeek.
Only, that’s not quite the reality. Student loans are unlike any loan or mortgage available from your bank. The amount you repay is based on how much you earn and not the size of the loan.
If you never earn over £21,000 you will never repay a single penny and after 30 years any amount you owe is wiped. No matter how much you have re-payed, the outstanding balance is lifted from you.
As Martin Lewis at Money Saving Expert points out, the total loan amount is a misleading figure, what matters is your monthly repayments after graduation. More graduate tax and less loan repayment.
Before graduation what matters is your monthly income (including any maintenance loan) and whether this covers your expenses.
We want you to be able to afford your time with us.
- We want you to take advantage of the scholarships and bursaries we offer.
- We want you to use the support and guidance we offer to find part time work.
- We want you to ask for help if you think you’ll need it.
The key things to remember are this: University hasn’t become “more expensive”. The changes to tuition fees and maintenance loans won’t change the amount you repay. The attention given to the the size of the loan distracts from the thing that actually affects you, the general cost of living, balancing socialising with study, work experience with societies.
If you’ve got a concern about funding your time at university, come and talk to the Financial Guidance Team:
Email: money@northampton.ac.uk or call: (01604) 892833
