tuition Fees |
Hate 'em or loathe 'em, tuition fees are a reality. But who pays what and how?
- PUSH'S 90 SECOND GUIDE: Insight into £9,000 university fees
- Free education? What's that?
- Paying it back
- Okay, so, how do I apply for my loans?
- So you said graduates earn way more?
- Erm...interest what is that?
- Should I just go for the cheapest option?
- All the small print: Finance for real people
- What if I want to change my course or my uni?
- Students from different parts of the UK and beyond
PUSH'S 90 SECOND GUIDE:
an Insight into £9,000 tuition fees
|
Lucy tries to share her experiences of the increased university fees to £9,000 but gets distracted by her cat. Don't let higher university fees distract you from what you want to do.
|
Aron tells you about his experience of the £9,000 tuition fees. As the first in his family to go, he’ll give you insider info on what uni’s like when you’re going in blind.
|
Free education? whats that?
Tuition fees are the yearly cost of a course (a degree/foundation degree) at a university or college. The fancy group name for both of these places is 'higher education institutions' (HEIs) but we prefer to keep things simple, so for the rest of this section we'll just refer to HEIs as 'universities'.
Tuition fees should cover most things for your course, but some universities might make you pay for a few extras separately, like graduation gowns, certificates and parent tickets, and so on. Also, don’t always assume the (up to) £9,250 a year fees will include your own photocopying, library fines, specific course materials, room rentals, or even some cash towards a swish new Mac.
Every single one of the 150 (or so – it changes each year) universities will be different, and will charge you for different things. No two universities are the same, and therefore no two tuition fees will cover the same things. Whatever the case, they shouldn't be charging you much at all for stuff above your £9,250, which is the maximum per year you'll 'pay'.
As a British student, to go to uni in the UK, you borrow money from the Student Loans Company (SLC) - a non-profit organisation owned by the government. You can borrow in the form of two different loans but it's up to you which one you decide to take out. You can choose to select both (or neither). Over 85% of UK students choose to grab both to support them financially through university life.
The loan you're most likely to take out is the tuition fee loan, which most students think is just the money you pay to study on your course. But oh no, it's never just for your course.
Think of your tuition fee loan as your ‘university experience’ fee instead: it goes on a whole range of things that help make uni life fun and easier. This includes the upkeep of the university itself, learning resources and facilities, libraries, free internet, discounted food and drink, digital resources, and things like the Student Union (the really fun place with clubs, events and societies).
Your ‘university experience’ fee can even go on things like one-to-one support, counselling and mental health support, since universities know that times can get stressful. They want to ensure you're supported throughout the course in body and mind, so you have the best possible chance of passing the course (and passing with a good grade).
Why? Well, because universities have to publish their drop-out rates, and if they look after you well, inside and outside your studies, you're less likely to drop out. Obvs.
Your ‘university experience’ fee also goes towards bursaries and scholarship – pots of money to help support the less advantaged students to study there, of which you might be one. (If you qualify to get some free money, you’re essentially getting some of your loan straight back to your pocket!)
Finally, your ‘university experience’ fee also goes on the cost of running employability services and events; they want to help connect you with employment opportunities for when your course finishes so that on top of your studies, you’re now a highly desirable job-ready super-being.
Why? Because universities like to publish how many of their graduates are in employment or full-time study six months after finishing their course.
Right, so now you understand what your loan goes on, here's more nitty gritty:
Higher education doesn’t come cheap and somebody has to foot the bill to run the universities, pay the lecturers, put books and computers in the library and so on. Who should cough up the dosh, however, is a controversial matter. Push has no opinion (or not one that doesn’t involve using a lot of punctuation keys on the keyboard) – we’re only here to tell it like it is.
Once upon a time, students in Britain didn’t have to pay a penny towards their higher ed. years, in the same way that pupils don’t have to pay for the privilege of going to state schools. That all changed and now unless you’re a dab hand with a time machine and can go back a decade or two, chances are you’re going to have to cough up a bit towards your tuition costs. Sorry.
Tuition fees should cover most things for your course, but some universities might make you pay for a few extras separately, like graduation gowns, certificates and parent tickets, and so on. Also, don’t always assume the (up to) £9,250 a year fees will include your own photocopying, library fines, specific course materials, room rentals, or even some cash towards a swish new Mac.
Every single one of the 150 (or so – it changes each year) universities will be different, and will charge you for different things. No two universities are the same, and therefore no two tuition fees will cover the same things. Whatever the case, they shouldn't be charging you much at all for stuff above your £9,250, which is the maximum per year you'll 'pay'.
As a British student, to go to uni in the UK, you borrow money from the Student Loans Company (SLC) - a non-profit organisation owned by the government. You can borrow in the form of two different loans but it's up to you which one you decide to take out. You can choose to select both (or neither). Over 85% of UK students choose to grab both to support them financially through university life.
The loan you're most likely to take out is the tuition fee loan, which most students think is just the money you pay to study on your course. But oh no, it's never just for your course.
Think of your tuition fee loan as your ‘university experience’ fee instead: it goes on a whole range of things that help make uni life fun and easier. This includes the upkeep of the university itself, learning resources and facilities, libraries, free internet, discounted food and drink, digital resources, and things like the Student Union (the really fun place with clubs, events and societies).
Your ‘university experience’ fee can even go on things like one-to-one support, counselling and mental health support, since universities know that times can get stressful. They want to ensure you're supported throughout the course in body and mind, so you have the best possible chance of passing the course (and passing with a good grade).
Why? Well, because universities have to publish their drop-out rates, and if they look after you well, inside and outside your studies, you're less likely to drop out. Obvs.
Your ‘university experience’ fee also goes towards bursaries and scholarship – pots of money to help support the less advantaged students to study there, of which you might be one. (If you qualify to get some free money, you’re essentially getting some of your loan straight back to your pocket!)
Finally, your ‘university experience’ fee also goes on the cost of running employability services and events; they want to help connect you with employment opportunities for when your course finishes so that on top of your studies, you’re now a highly desirable job-ready super-being.
Why? Because universities like to publish how many of their graduates are in employment or full-time study six months after finishing their course.
Right, so now you understand what your loan goes on, here's more nitty gritty:
- Tuition fees loan (University experience fee): the money you don’t ever see during your time at uni, as the Student Loans Company pay it directly to your uni, and you just pay back what you can afford over 30 years after graduation. The fee can be up to £9,250 for each year of study for public-funded universities. Private universities can charge significantly less or significantly more. Check out our tips on private universities here. Don't get caught up on this though, it's only a technical debt, and one you probably won't pay back fully.
- Maintenance loan (direct dosh to 'maintain' you): the money you actually see. As suggested in the name, it’s the money put directly into your bank account (three times per university year) to maintain you and your university lifestyle. It’s there to help you through the costs of university in whichever way you see fit. You can spend it in any way you want throughout your time at university, and most people opt for the loan to spend it on the two biggest expenses you need to pay for: accommodation and food. Especially if you’re living away from home (and even more importantly if you're in London), as tonnes of students choose to do in order to build the skill of independence and self-reliance. You may also need to spend money, if living away from home, on travelling back to the 'rents for the holidays, and let's not forget: fun stuff! Remember uni can be extremely fun if you want it to be. You may also have to use your maintenance loan to pay for anything for your course that the university doesn’t provide (books, lab or art materials perhaps, and field trips).
Higher education doesn’t come cheap and somebody has to foot the bill to run the universities, pay the lecturers, put books and computers in the library and so on. Who should cough up the dosh, however, is a controversial matter. Push has no opinion (or not one that doesn’t involve using a lot of punctuation keys on the keyboard) – we’re only here to tell it like it is.
Once upon a time, students in Britain didn’t have to pay a penny towards their higher ed. years, in the same way that pupils don’t have to pay for the privilege of going to state schools. That all changed and now unless you’re a dab hand with a time machine and can go back a decade or two, chances are you’re going to have to cough up a bit towards your tuition costs. Sorry.
paying it back
Here’s the tasty bit. No one has to pay the two loans back until after they graduate. This arrangement is supposed to stop studious 18-year-olds being as reliant on their parents for tuition fee cash as they were previously.
If you, your parents, best friend or sugar daddy really really want to pay your fees upfront whilst at university because you honestly can’t think of anything better to do with the spare wedge of green burning a hole in your bank account (might Push suggest buying a house? Travelling the world? Giving it to us?) then there’s nothing to stop you.
Although you'd be pretty much bonkers to do it, and pretty stupid too (unless you're earning £40,000 directly on finishing your degree, and enjoy high pay rises over the next 30 years because 85% of students won't pay back everything they borrowed to go to university. It's based on your earning power over 30 years, not how much money you borrowed.
For most of those students without a lottery win or a trust fund behind them (or a generous pimp), paying back early won’t even be an option, so don't worry yourself about it. You won’t actually see any of the tuition fee money, as it'll be paid to the university directly, on your behalf.
This effectively means that the government – through the Student Loans Company – is paying your full fees for you AND putting money in your account each month to maintain you. While doing so, they know they won't even get all of it back from most graduates. Cray-cray, right?
Eventually the government starts to get the cash back off you, directly out of your pay packet, along with your tax and national insurance. In fact, think of any student loan repayments you have to make (always a fixed 9% of anything above £25,000, so not much) as a third tax you're paying back to the government. This one is a tax that allowed you to go to university and be earning (on average) up to a quarter of a million pounds more because you have a degree.
You won't ever see the loan repayments, you won't accidentally spend the loan repayments, there's no debt collectors on the loan repayments. So seriously, don't worry about them. Also, they only take it off your salary automatically for 30 years. That sounds like a long time, but when you're 52, you might still owe thousands, but they'll just press "delete" on your repayments, and they stop forever.
Bonus: if you're ever earning below £25,000 (stop working/hunting for a new job/gap year/maternity or paternity leave) any repayments automatically stop again
If you, your parents, best friend or sugar daddy really really want to pay your fees upfront whilst at university because you honestly can’t think of anything better to do with the spare wedge of green burning a hole in your bank account (might Push suggest buying a house? Travelling the world? Giving it to us?) then there’s nothing to stop you.
Although you'd be pretty much bonkers to do it, and pretty stupid too (unless you're earning £40,000 directly on finishing your degree, and enjoy high pay rises over the next 30 years because 85% of students won't pay back everything they borrowed to go to university. It's based on your earning power over 30 years, not how much money you borrowed.
For most of those students without a lottery win or a trust fund behind them (or a generous pimp), paying back early won’t even be an option, so don't worry yourself about it. You won’t actually see any of the tuition fee money, as it'll be paid to the university directly, on your behalf.
This effectively means that the government – through the Student Loans Company – is paying your full fees for you AND putting money in your account each month to maintain you. While doing so, they know they won't even get all of it back from most graduates. Cray-cray, right?
Eventually the government starts to get the cash back off you, directly out of your pay packet, along with your tax and national insurance. In fact, think of any student loan repayments you have to make (always a fixed 9% of anything above £25,000, so not much) as a third tax you're paying back to the government. This one is a tax that allowed you to go to university and be earning (on average) up to a quarter of a million pounds more because you have a degree.
You won't ever see the loan repayments, you won't accidentally spend the loan repayments, there's no debt collectors on the loan repayments. So seriously, don't worry about them. Also, they only take it off your salary automatically for 30 years. That sounds like a long time, but when you're 52, you might still owe thousands, but they'll just press "delete" on your repayments, and they stop forever.
Bonus: if you're ever earning below £25,000 (stop working/hunting for a new job/gap year/maternity or paternity leave) any repayments automatically stop again
ok, so how do i apply for my loans?
You can apply for the tuition fee loan online at www.studentfinancedirect.co.uk or get hold of the forms from your LEA (Local Education Authority). It's fairly straightforward but you won't be left to figure it all out by yourself – your teachers and careers advisors should be able and willing to help you apply for this.
As with all student funding, it’s worth applying as soon as possible (the cut off is the end of May, for starting a degree that September). It doesn’t matter whether you’re certain about which course you’ll study – if in doubt, just put down the one that’s most likely and be sure to tell Student Finance England if you change your plans.
As with all student funding, it’s worth applying as soon as possible (the cut off is the end of May, for starting a degree that September). It doesn’t matter whether you’re certain about which course you’ll study – if in doubt, just put down the one that’s most likely and be sure to tell Student Finance England if you change your plans.
so you said graduates earn way more?
On average, yes. People with a degree earn (on average) around £10,000 extra per year, and find a job twice as quickly, should you ever find yourself unemployed. The average starting salary for someone who completes university is between £18,615 and £22,785. Do the math, y'all.
If you're earning under £25k at any point in the 30 years after finishing your course, you don't pay a penny back. You might not be earning that much for a while within your 30 year repayment window, anyway. The only way you'll pay back your entire student loan is if you're earning a load of money.
A good way to think of it is this: if you pay back all of the money you borrowed, along with the interest they put on it, you can afford to pay it back. Only a tiny proportion of the highest earning grads will pay everything back, over the 30 years, with the interest repayments too. If you manage it, go you – you're earning a (insert expletive here) load of money.
Remember we said to think of it like a tax? People who earn a lot each year pay the most tax and can afford to. If you're not getting our point by now, we might have to knock on your door and explain it face to face.
Here’s a quick example: if you’re earning £30,000 after uni, you’ll be paying back £450 that year. That's £37.50 each month. If you think of it as £9.38 each week, that’s three Starbucks Caramel Frnappuccinos, or cheaper than one Nando's. People spend more than £37.50 each month on video games.
It's all about how much you value your degree, as well as the extra income it's most likely giving you. Just budget sensibly: you know the amount that will always be coming off (9% of anything above £25,000) so just remember to minus that off of what you have available to spend each month, and minimise your outgoings.
If you're earning under £25k at any point in the 30 years after finishing your course, you don't pay a penny back. You might not be earning that much for a while within your 30 year repayment window, anyway. The only way you'll pay back your entire student loan is if you're earning a load of money.
A good way to think of it is this: if you pay back all of the money you borrowed, along with the interest they put on it, you can afford to pay it back. Only a tiny proportion of the highest earning grads will pay everything back, over the 30 years, with the interest repayments too. If you manage it, go you – you're earning a (insert expletive here) load of money.
Remember we said to think of it like a tax? People who earn a lot each year pay the most tax and can afford to. If you're not getting our point by now, we might have to knock on your door and explain it face to face.
Here’s a quick example: if you’re earning £30,000 after uni, you’ll be paying back £450 that year. That's £37.50 each month. If you think of it as £9.38 each week, that’s three Starbucks Caramel Frnappuccinos, or cheaper than one Nando's. People spend more than £37.50 each month on video games.
It's all about how much you value your degree, as well as the extra income it's most likely giving you. Just budget sensibly: you know the amount that will always be coming off (9% of anything above £25,000) so just remember to minus that off of what you have available to spend each month, and minimise your outgoings.
erm, interest... what is that?
Martin Lewis, Founder & Chair of MoneySavingExpert.com, says the added interest is actually not part of the equation: “most graduates won’t come close to repaying 6.1% interest rate. More potently it’s because what you owe [your borrowing plus interest] doesn’t change what you repay. That’s fixed at 9% of everything earned above £25,000. I’m tempted to say ‘rip up your student loan statement’ – it’s just frightening and irrelevant. Just accept you’ll pay a 9% increased tax-like burden."
Basically, the interest added on doesn’t at all affect the amount you pay each money. That stays fixed. If you’re earning £36,000 you'll pay back just under £40,000 of the predicted £55,000 loan over 30 years, meaning they’re wiping £15,000 of your interest when you get to 52 years of age, And you’ve not paid a single bit of that interest.
It doesn’t matter and is completely irrelevant because you pay a fixed 9% of your salary, not of the package of your loan and any interest. The actual price of the tuition fees is a falsity and not even worth looking at/worrying about. The fees could be put up to £1 million a year for British university and you’d still be paying back the exact same amount: 9% of any money you’re earning above £21,000.
In this situation, even fewer people would pay back their tuition fees (plus interest). Anyone who did pay it all back would be a millionaire, and we’d all say “well that’s ok, they could afford to anyway”, which is exactly the same as how it works now. Only 23% of students will pay back their entire loans + interest over 30 years, as they will be the richest ones.
75% of students won’t pay back everything they borrowed, so you’d be paying off money that you otherwise might not have paid off and interest you might never have paid back – you’ll only know after 30 years anyway. Don’t give the government or student loans company a penny more than you need to each month. They say that is 9%.
If you are a Welsh student, it all works in exactly the same way. If you’re a Scottish or Northern Irish student, you start paying back at a lower point: when you’re earning over £16,365 per year.
Basically, the interest added on doesn’t at all affect the amount you pay each money. That stays fixed. If you’re earning £36,000 you'll pay back just under £40,000 of the predicted £55,000 loan over 30 years, meaning they’re wiping £15,000 of your interest when you get to 52 years of age, And you’ve not paid a single bit of that interest.
It doesn’t matter and is completely irrelevant because you pay a fixed 9% of your salary, not of the package of your loan and any interest. The actual price of the tuition fees is a falsity and not even worth looking at/worrying about. The fees could be put up to £1 million a year for British university and you’d still be paying back the exact same amount: 9% of any money you’re earning above £21,000.
In this situation, even fewer people would pay back their tuition fees (plus interest). Anyone who did pay it all back would be a millionaire, and we’d all say “well that’s ok, they could afford to anyway”, which is exactly the same as how it works now. Only 23% of students will pay back their entire loans + interest over 30 years, as they will be the richest ones.
75% of students won’t pay back everything they borrowed, so you’d be paying off money that you otherwise might not have paid off and interest you might never have paid back – you’ll only know after 30 years anyway. Don’t give the government or student loans company a penny more than you need to each month. They say that is 9%.
If you are a Welsh student, it all works in exactly the same way. If you’re a Scottish or Northern Irish student, you start paying back at a lower point: when you’re earning over £16,365 per year.
so should i just go for the cheapest option?
On the one hand, the full tuition fees of £9,250 a year will whack on a hefty lump of debt, to be paid back after graduation. Lower or no fees will mean less debt.
However, going to university these days means that, for all but the very rich (or the very lucky), getting into a shedload of debt is a matter of course. It's only a technical debt, and if you look up 'indebted' in the dictionary, you may be surprised of the definitions you find.
There are ways to keep spending to a minimum, but tuition fees are one area where it’s really not worth scrimping. Not just because there are so few courses going on the cheap, but also because getting on to the right course will have a huge impact on how much you do (or don’t) enjoy university, as well as sometimes, how much you earn after the course too.
If the course you want to study has lower tuition fees, that’s brilliant and Push is very pleased for you. But if it’s a choice between paying more for your dream course or slightly less for something that – to you at least – is a second-rate option, think long and hard about whether any saving is really worth it.
Far better to take on a bigger debt in order to study something which really floats your boat, than sink nearly as deep into the red for a course that just doesn’t get your juices flowing. As a graduate, in the long term, paying back the debt shouldn't be a problem.
However, going to university these days means that, for all but the very rich (or the very lucky), getting into a shedload of debt is a matter of course. It's only a technical debt, and if you look up 'indebted' in the dictionary, you may be surprised of the definitions you find.
There are ways to keep spending to a minimum, but tuition fees are one area where it’s really not worth scrimping. Not just because there are so few courses going on the cheap, but also because getting on to the right course will have a huge impact on how much you do (or don’t) enjoy university, as well as sometimes, how much you earn after the course too.
If the course you want to study has lower tuition fees, that’s brilliant and Push is very pleased for you. But if it’s a choice between paying more for your dream course or slightly less for something that – to you at least – is a second-rate option, think long and hard about whether any saving is really worth it.
Far better to take on a bigger debt in order to study something which really floats your boat, than sink nearly as deep into the red for a course that just doesn’t get your juices flowing. As a graduate, in the long term, paying back the debt shouldn't be a problem.
the small print: finance for real people
It’s easy enough to talk about students as an amorphous collective blob, to say this is how it is if your parents earn this or if you live there, but students are more than case studies. Students – yes, even students – are real people.
And, because they’re all individuals and it follows that there are so many exceptions to any rule Push might try to describe, things might seem a bit like school playground classic British Bulldog – the only rule is: there are no rules.
This section is dedicated to the exceptions, and to the individuals who, one way or another, actually make up about half the student population.
And, because they’re all individuals and it follows that there are so many exceptions to any rule Push might try to describe, things might seem a bit like school playground classic British Bulldog – the only rule is: there are no rules.
This section is dedicated to the exceptions, and to the individuals who, one way or another, actually make up about half the student population.
What if i want to change my course or uni?
Don't rush into any hasty decisions, switching subject or university ain't like taking back a pair of impulse bought shoes. It's a big deal. Talk about it first – to friends, to parents, to tutors, to the students’ union welfare department, to people in the street, priests, radio talkshows - anyone really, till you’re either bored of the idea or absolutely convinced it’s the right thing to do.
The reason you need to take such care is that it will affect you financially, and there may be the most horrendous pile of red tape and administrative hassle to deal with. And, as with the shoes, don't expect your money back.
But if you’re more sure of yourself than a cocky geezer out on the razz, then:
The reason you need to take such care is that it will affect you financially, and there may be the most horrendous pile of red tape and administrative hassle to deal with. And, as with the shoes, don't expect your money back.
But if you’re more sure of yourself than a cocky geezer out on the razz, then:
- Tell your university what you’ve decided to do. Generally it’s easier to change courses than institutions.
- Tell your LEA (or the SLC, if you live on one of the parts of the country where they deal with the application). They can give you a change of circumstances form (CO1), which is also downloadable from www.studentfinancedirect.co.uk. It’s pretty straightforward to fill out and covers leaving or taking time out from your course, changing course or even changing other details like your name. They’ll also be able to advise you on any extra bits of paperwork you need to complete.
- If the fees for your new course are higher than those on the old course, you may be able to apply for an extra loan to cover the difference – get hold of a tuition fee loan request form from www.studentfinancedirect.co.uk . The form is pretty easy to fill out and covers leaving, changing or taking time out of your course. Student Finance Direct can also advise you on any extra bits of paperwork you're struggling to pen in.
adverts
|
|
|
|