Student loan: what do I need to know to apply? | Student funding


IIt might seem a bit premature considering what’s going on around the world, but for anyone planning to start college in the fall, the deadline for student loan applications falls on May 22. If you – or your offspring – are in this boat, here’s what you need to know about the process.

Do I really have to apply now?

No. Although it is described as a deadline, it is not a hard and fast deadline. The Student Loan Company (SLC) has asked students to apply early to give its staff a chance to start processing applications. Across all age groups, around 1.3 million students go to university in England each year and it takes time to look after everyone. Students returning for their second year or more are encouraged to send in their applications by June 19.

Above all, you don’t need a confirmed place or even have decided which university you want to attend. There is nothing wrong with doing it now, because you are not tied to anything.

What am I applying and how do I do it?

Most aspiring students (at least outside Scotland) will need to apply for a tuition loan, which will cover your course fees – £ 9,250 per year. This is paid directly by the SLC to your university or college, but only after you register.

Next is the maintenance loan, which is designed to help cover living expenses such as accommodation and food. There is no obligation to request it. Unlike the fee loan, the amount you are offered will depend on your household income, whether you are away from home and whether or not you are studying in London. The maximum available is £ 12,010 per year for those living far from home in London and £ 9,203 for those living away from home elsewhere.

Applications are now all made online. They take around 30 minutes and you will need your national insurance number, passport and bank details. Go to gov.uk/studentfinance, studentfinancewales.co.uk,

saas.gov.uk or studentfinanceni.co.uk, depending on whether you live in England, Wales, Scotland or Northern Ireland.

Scottish students do not pay home tuition. In Wales there are means tested scholarships.

If you are under 25 and have no contact with your parents, you may be able to apply as a “foreign student”. This means that your parents’ income will not be taken into account and you will be entitled to a full loan.

Parents or guardians of those applying for maintenance loans will receive an email asking them to log in and report their income, which is verified with HMRC.

Be aware that in most cases, the maintenance allowance will not cover the full cost of studies, even if you take the life of a monk. Parents are expected to contribute.

The Student Loan Company asked students to apply early to give their staff a chance to start processing applications Photograph: Alamy

My household income seems very uncertain – what should we do?

The calculation of the maintenance loan for students from 2020 is based on their parents’ 2018-19 tax year income, and this is what should be noted first. However, if your income this year is to be at least 15%, higher, or lower – which could apply to a large number of households this year – parents should request an assessment of current year income ( CYI).

“The advice is to let us know of any significant changes in parental income at any time,” SLC told Guardian Money.

Students who obtain maintenance loans on the grounds that a parent was not working may be recovering any overpayment in the second year. Likewise, a student from a household that had lost an income, could miss vital payments if the SLC is not updated.

Once the application is processed – which normally takes six to eight weeks – the student receives a letter of “entitlement to student funding”.

If I apply for the loan and end up not going, what happens?

Nothing: the only thing you will have lost is the time spent filling out the forms. Neither the college fee payment nor maintenance loan payments are made until the SLC sees proof that the student has enrolled.

Ideally, you will tell the SLC that you no longer wish to attend. But if you don’t enroll in your chosen course, the loan will expire.

Given the uncertainty surrounding how and when classes will resume – with the possibility that the first term could be entirely online, many potential undergraduates will want to keep this important guarantee.

If you decide to extend your start date to 2021, you will need to reapply for funding next year.

I prefer to wait and see how things unfold – will that have an impact?

No, and you are unlikely to be alone. The system is already designed to handle students who go through compensation and apply for loans at the last minute. In theory, students can apply up to nine months after starting a course. Those who leave very late could find themselves facing a few weeks or maybe a month or two without child support, which means they’ll need the money to fill the void.

When do I have to repay the loans?

Not before starting to work. Payments are collected automatically and currently take effect as soon as your income exceeds £ 511 per week or £ 2,214 per month (before taxes and other deductions) – just over £ 26,500 per year.

You will earn interest from day one. While you are studying, the rate is currently 5.4%. When you graduate, it will depend on whether you earn enough to pay off the loan. If you’re not, the interest rate goes down – it’s currently 2.4%.

But it is unlikely that you will ever pay off all of your debts. After 30 years, the loan will be canceled and only the top earners will probably have paid everything back by then. Until then, the loan will not affect your credit rating.

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