Student Loans - Financial Support in H.E.

If you are planning to start a higher education course in 2002, you will want to make sure you have your finances sorted out in good time. The Government helps students so that they are not prevented from entering, or staying in, higher education because of the cost.

The Government can help in two main ways; first with help towards the costs of your tuition fees and second with student loans and other help towards your living costs.

student financeHelp towards your tuition fees

50% of students starting in Higher Education in 2002 will pay no tuition fees - the Government will meet the full cost of tuition for these students. However, students whose family income is over £20,480 a year are required to make a contribution. The maximum contribution for 2002/03 is £1,100 per year. However, it is important to remember that most students will get help with their fees and, unlike student loans, this help does not have to be repaid.

Student Loans

Help towards your living costs will come mainly from student loans. These are not commercial loans that are offered by high street banks. They are very cheap loans. The rate at which you repay your loan is directly linked to your income once you have graduated.

The maximum student loan available in 2002/03 is £4,815 for students living away from home and studying in London. For students living away from home and studying outside London the maximum loan is £3,905 and for students living at home the maximum loan is £3,090.

75% of the maximum loan is available to all eligible students regardless of any other income they have. Whether you can get any or all of the remaining 25% depends on your income and that of your family. As a general guide, if you do not pay fees, you will be able to get the maximum loan.

Repaying student loans

You do not have to start repaying student loans until after you have left university or college and your income has reached a certain level (currently £10,000 a year). Repayments take account of inflation but do not have the same interest rate, which banks and other lenders charge.

Additional help

Extra help towards living costs is available, depending on your circumstances. This help is available to mature students, students with dependants, single parent students, disabled students and those incurring certain travel costs. You do not normally have to repay this extra help. If you think financial difficulties might prevent you taking up your place, you should talk to admissions tutors or student services staff at your university or college about how they can help you. Also if you experience financial difficulties whilst at college, you may also be able to get help from your university or college.

Applying for Student Loans

There are four steps in the process;
1. From the end of January 2002 - apply to your Local Education Authority (LEA). You can get an application form, called an HE1, from your LEA or the Student support website on www.dfes.gov/studentsupport

2. Complete the application form and return it to your LEA by their deadline - March 15 2002*. If you are eligible for help they will send you a financial form, called an HE2, to complete.

3. Complete the HE2 financial form with the help of your family and return it to your LEA by their deadline - 21 June 2002*. Your LEA will then tell you whether you need to pay any fees and how much loan you can get. Your LEA will also send you a loan request form.

4. Complete the loan request form and send it to the Student Loans Company (SLC). (The SLC issue student loans on behalf of the Government) Note: The SLC will usually pay your loan in three instalments. Your first instalment is likely to be in the form of a cheque, which you can collect from your college at the start of term. Further instalments will be paid directly into your bank or building society account - if you do not have an account at the moment, you can set one up nearer the time you start at university or college.

*Do not worry if you have missed these deadlines. Your LEA will still accept applications made after these dates; however, if you apply late they cannot guarantee that your loan will be ready for you when you go to college.