How to pay for uni or college
Want to go to uni or college but afraid of the cost? You aren’t alone. Funding a further education course can be expensive, but there are ways to get help and be wise with your (or your parents’) money.
This summer, the Thomson Cooper marketing team are joined by Jade, our latest intern. Jade is in the middle of her degree and wants to encourage other people to consider further education. She knows that affordability can be a real issue for some so has put together this simple guide to help you understand what’s on offer and where to go for more advice.
Hi, I’m Jade. I know that deciding to go to university or college is an exciting milestone in anyone’s life but it is also a big investment. However, that doesn’t mean there isn’t financial help to support you on your learning journey. Here I’m aiming to provide some information, advice and clarity on how loans, bursaries, grants and overdrafts can support you financially in further education.
In Scotland, eligible Scottish students who study full time are not required to pay tuition fees for their first degree or equivalent to universities or college (SAAS (a),2017). Tuition fees are free because of the government body, Students Award Agency for Scotland or more commonly recognised as SAAS. Loans provided by SAAS that cover student’s tuition fees do not need to be paid back. But a point to highlight that SAAS only covers up to £9,000 in university fees for universities out-with Scotland.
As well as SAAS being able to pay your tuition fees, they also offer a student loan. The loan amount is dependable on your household income but the highest amount they offer is £5,750 and the lowest being £4,750. You receive your loan through ten monthly payments but you will receive a double month’s payment during the first month e.g. A university year runs from September to May (loan of £4,750 = £950 in September, £475 each month after till May).
However, many people are put off further education due to hearing words like ‘student loans’ and thinking they will be drowning in thousands pounds worth of debt after studying (Lewis, 2017). But an important fact to highlight is that you do not repay your loan until after you graduate and are earning over £17,775 (the income threshold). Even with that annual income, your monthly repayment is just £4 a month. That doesn’t mean you can’t pay off large sums if you are able but SAAS’s repayment method enables students to pay back their loans in manageable parts (Lewis, 2017).
Many parents worry if their children are in low earning jobs they will need to pay large sums each month but that is not the case, the higher you earn, the more you pay back each month. How the repayment system works is your employer will deduct 9% of whatever you earn from your wage which will be your monthly payment towards paying off your loan. For example, if you earn £20,000 you will pay: minus the minimum repayment (£17,775) = £2,225. Take 9% of £2,225 =£200.25 (this is what you pay annually) and divide this number by 12 to get your monthly payment amount = £16.69 monthly (SAAS (a),2017).
Student loans are one of the best loans you can get (Lewis, 2017) as it does not go on your credit file, it has low interest, only start paying it back when you are earning a certain amount and doesn’t just affect a mortgage application– the lender just checks if you can afford a mortgage on top of a monthly student loan repayments.
To apply for tuition fees and a student loan if needed, it is crucial to remember to apply before the deadline in June and just as important to re-apply each year you require the loan and student loan. Applying for SAAS is an easy online application at www.saas.gov.uk.
The Students Award Agency for Scotland (SAAS) also offers bursaries which you do not need to pay back (SAAS (a),2017). These include:
The Young Student’s Bursary = eligible for those from a low-income household and can receive up to £1,875 depending on the amount of household income.
The Independent Student bursary = eligible for independent students (e.g.at least 24 years, married, graduate, professional student, member of armed services)
Care Experienced Students bursary = eligible for those who have been looked after in UK local authorities, under 26 years, replaces income-assessed living cost loan bursary)
Nursing/Midwifery bursary = eligible for those studying nursing or midwifery (£6,578 for years 1,2,3 of study and £4,934 for year 4)
Living Cost Grants = have a range of grants including dependents grant (for students who also care for someone), lone parents grant, nursing/allied health profession (occupational health therapists, radiographers etc.) travel expenses to placement, disabled students allowance (provide for equipment and extra support during studies)
Some Universities have their own grants such as Edinburgh University’s Access grant which supports UK students who have financial difficulties and can receive a minimum of £1000. (Edinburgh University, 2017)
What is an overdraft?
An overdraft is an agreement that you make with your bank which allows you to spend more money from your account that you have in it (Francis, 2016). For example, if you have a £100 overdraft and spend £200, you balance will show as -£100. It is crucial to see an overdraft as a safety net and not “free money” as it is credit. An overdraft should be used for emergencies like an unexpected bill.
What overdraft should I get as a student?
Martin Lewis (2017), founder and CEO of MoneySavingExpert.com encourages students to…
Get the biggest overdraft with 0% interest
Never go beyond the agreed limit as you can be charged up to 24% interest and extra charges every time you use your card resulting in your credit rating being effected.
Switch to a top graduate account after graduating from university – this can help pay off your overdraft.
Don’t just settle for an overdraft from your nearest bank and the branch that offers freebies, go and do some research to find the best one for you financially.
Examples of some recent bank’s student overdrafts
HSBC (2017) offer the largest overdraft of £3,000 for over 5 years with 0% interest.
Nationwide’s (2017) ‘FlexStudent’ account offers £1,000 in year one of study, £2,000 in year two, £3,000 in year three, again interest free.
This isn’t an exhaustive list but I hope it provides a good starting point. Good luck with your studies and keep tuned for my next blog about credit and credit scores.
Thomson Cooper accept no responsibility for any loss arising to a person acting or refraining from action as a result of this article. Advice should be sought in individual circumstances.
Edinburgh University (2017) Access Bursary [online] Available at: http://www.ed.ac.uk/student-funding/undergraduate/uk-eu/bursaries/access-bursaries
Francis, S (2016) Student Bank Accountants [online] Available from: http://www.moneysavingexpert.com/students/Student-bank-account Martin, L (2017) Student Loans Mythbusting [online] available from: http://www.moneysavingexpert.com/students/student-loans-tuition-fees-changes
HSBC (2017) Student Current Accounts [online] Available from: https://www.hsbc.co.uk/1/2/current-accounts/student-bank-account
Nationwide (2017) FlexStudent Current Account [online] Available from: http://www.nationwide.co.uk/products/current-accounts/flexstudent/features-and-benefits
SAAS a (2017) Full Time, Nursing/Midwifery Bursary [online] Available from: http://www.saas.gov.uk/full_time/nmsb/funding_available.htm
SAAS b (2017) Funding Guide [online] Available from: https://www.saas.gov.uk/_forms/funding_guide.pdf