Student Loans – fund your course without debts

Category: Students

Are you ready to leave home and become financially aware?

The cost of starting a further education course can become a nightmare. You will suddenly become responsible for purchasing for all your:

• Textbooks etc
• Transport
• Tuition Fees
• Expenses i.e. living & socialising

Potentially huge debts will begin to mount up and you'll end up wishing you never set foot in the realms of further education. However, if approached in the right manner your student debt can become easy to manage. No worries either about repaying the loan until you've graduated and are earning over a certain threshold!

What are student loans?

Student loans are designed to assist you through the costs of higher education. Loans are provided by the Student Loan Company Ltd (SLC) officially backed by the Government for students in England or Wales.

At 1.5% for 2010/2011 the SLC loan is the best place to start in terms of borrowing you are given two loans:

1. Maintenance
   - each student will receive a guaranteed 72% of the loan and the remaining 28% is decided on residual income
2. Tuition Fees

How much money will I get?

The table below illustrates the amount you are likely to get over a Full Year period and in your Final Year. The Final Year payment is slightly less as they do not take into account your summer.

The loan is then repaid once you complete your course and graduate or if you leave. Currently graduates earning under £15,000 are not required to pay their loan. This figure is reviewed each year and loans become deferred if your earnings are not meeting the current level.

What to do with the money?

The loan is fully means tested and can be affected by your parent's earnings and location. It is always suggested that you take the full loan offered to you even if the money isn't needed as:

1. You can make interest in financial products such as Cash ISA's or High Interest Savings accounts
2. You'll have money to fall back on later in the year if you find yourself in financial bother

How to stay out of serious debt?

Staying out of serious debt being a student isn't as hard as it sounds. If you spend more then you've got and don't plan then you'll be in debt and borrowing more isn't the way forward.

Following these actions will ensure you stay on the right side of the £ sign

• Budget- everybody says "I budget" but do they really? Being able to plan your way through your course will reduce your expenditure and ensure you'll be left with a £10 note in your pocket at the end of the week to go shopping or socialising!
• Cut Utility Bills – make sure your paying the right amount of money for the bills you're currently paying. Constantly research deals and never take deals at face value. Deals that appear to be "too good to be true" then they are most likely to be so!
• NUS card – Many places will give you up to 10% discount for flashing an NUS card so don't forget to ask whether they offer a student discount as there no harm in asking!
• Part Time Job – Keep your eyes open for part time jobs that can work along side your course and give you extra money that is yours to spend. The job will get you meeting new people and into the world of employment while given you extra money to socialise.

To contact the SLC you can write to them at Student Loans Company Ltd, 100 Bothwell Street, Glasgow G2 7JD

Call them on free phone 0800 405010

Or check out information on the following websites: direct.gov.uk/studentfinance or slc.co.uk

Disclaimer: This information is intended solely to provide guidance and is not financial advice. Moneyfacts will not be liable for any loss arising from your use or reliance on this information. If you are in any doubt, Moneyfacts recommends you obtain independent financial advice.