Student finance: When are UK student loans written off?
Thousands of students across the UK are heading to university this month, with many universities holding their Freshers' Week celebrations this weekend.
If it's your first time at university and your first time managing your own budget, here is what you need to know about getting that all-important maintenance loan in your bank account.
How do student loans work?
The details depend on where in the UK you live but student loans are typically made up of:
a loan for tuition fees
a maintenance loan for living costs
Most people are entitled to the tuition fee element which is equal to the annual cost of your course up to £9,250 per year.
The maintenance loan is intended to cover accommodation, food, books and equipment.
Maintenance loans are means tested so the amount you get depends on your family's household income. You might get extra money if you are disabled or have children.
If you are under 25 and have no contact with your parents, you might be able to apply as an "estranged student". This means your parents' financial situation is not taken into consideration.
Research by the Higher Education Policy Institute suggests maintenance loans in England actually cover only about half the cost of living and less for students in London.
The Student Loans Company says graduates in England leave university with average debts of £48,470.
How much can I borrow?
The amount of maintenance help available varies across the UK.
This year, students in England will be able to borrow up to £10,227 a year for a maintenance loan if living in the UK, outside London and away from their parents. This increases to £13,348 in London.
In Scotland, the maximum annual maintenance loan is £9,400 for under-25s. Students studying away from home can borrow up to £11,150 if their home is in Wales (£14,170 if they go to London), and £6,776 if they're from Northern Ireland (£9,492 if they go to London).
Students from England can use the loans calculator on the Student Finance England website
Students from Wales can go to Student Finance Wales
Students from Scotland can go to Student Awards Agency Scotland
Students from Northern Ireland can go to Student Finance Northern Ireland
When will I get my first student loan payment?
The tuition fees are paid directly to your university or education provider.
The maintenance loan is paid directly to your bank account in instalments.
These are at the start of each term in England, Wales and Northern Ireland, and monthly in Scotland.
In order to be paid you'll need to register at your university or college. You'll usually do this in the first week of your course and you may have to take along your student finance entitlement letter.
In England you should get a text from the Student Loans Company a few days before to let you know the maintenance loan is on the way.
If you haven't applied for a student loan yet it's not too late. You can still apply for funding up to nine months after the first day of the academic year for your course.
The application process is different depending on where you live:
Students in England apply through Student Finance England.
Students in Wales apply through Student Finance Wales.
Students in Scotland apply through the Students Awards Agency Scotland
Students from Northern Ireland apply through Student Finance Northern Ireland.
How much interest will I be charged?
You are charged interest on the loan from the day you take it out, but the amount varies across the UK.
It is important to understand that the terms and conditions can change after you have borrowed the money. Any interest rate rises will apply to all student loans, not just new applications.
For students from England starting courses this year,the interest rate will normally be set at the retail price index (RPI) measure of inflation. It is currently 4.3%.
For students from:
Wales, the rate is up to 7.3% depending on your earnings
Scotland, it is 4.3%
Northern Ireland, it is 4.3%.
The amount graduates pay back will depend on how much they earn.
When do I have to start paying back my student loan?
You do not have to start repaying your loan until you earn a certain amount of money after graduation.
The threshold for students starting university in England this year will be £25,000.
In Wales it will be £27,295, in Scotland £31,395 and in Northern Ireland £24,990.
You do not repay anything if you earn less than the threshold.
The earliest you will start repaying is the April after you leave your course.
Payments are made automatically through the tax system.
You generally repay 9% of the amount you earn over the threshold.
When are student loans written off?
In England, students starting university this year will see their loans written off after 40 years, regardless of how much is owed.
In Wales and Scotland it is 30 years and in Northern Ireland it is 25 years.
You still have to repay your student loan if you leave your course early.
Some people may opt to make extra repayments to clear some or all of their loan early - there is no penalty for doing so.
