Parents - An Essential Guide to Student Loans
Seven Things Parents Need to Know About Student Loans
19 June 2018
Return to: www.slc.co.uk
Seven Things Parents Need to Know About Student Loans
19 June 2018
If your child is preparing to fly the nest to university after the summer, you may be wondering what it means for their bank balance.
That’s where the Student Loans Company comes in, as they administer funding on behalf of the Government and process all applications for students in England and Wales. Scottish students apply via the Student Awards Agency for Scotland and students in Northern Ireland apply to Student Finance Northern Ireland.
Derek Ross from the Student Loans Company, said: “Parents can help their children understand what funding is available and may also be asked for details to support their child’s student finance application.
“This is our busiest time as we process almost two million applications and prepare to pay students their funding, once they attend university.
“We ask that parents get any requested information to us as quickly as possible to ensure that their funding can be ready at the start of term.”
Advisors at SLC are on hand to help students and parents alike through the application process - here are seven things parents should know about student loans.
1. What is available – living costs and tuition fees
When your child goes to university or college, they’ll have two main costs – living costs and tuition fees, which they can apply for support to help with.
A Maintenance Loan helps students with their living costs, such as accommodation, travel and books. Everyone who’s eligible for student finance can get some Maintenance Loan, but they can apply for more that’s based on your household income – that’s the income of you and your partner, if you have one.
The below table will give you an idea of roughly how much Maintenance Loan your child can expect to get based on your household income, if they are a student in England.
|Full-time student||2018 to 2019 academic year|
|Living at home||Up to £7,324|
|Living away from home, outside London||Up to £8,700|
|Living away from home, in London||Up to £11,354|
|You spend a year of a UK course studying abroad||Up to £9,963|
Here is some information on the maintenance loans available depending on your household income. A full table with income amounts is available: https://www.practitioners.slc.co.uk/media/1608/sfe_student_finance_package_from_august_2016_fs_1819_o.pdf
|Household income||Maintenance Loan|
Your child can also get a Tuition Fee Loan of up to £9,250 to cover their tuition fees. How much they can get doesn’t depend on your household income – the fees are set by the individual university.
If your child has a disability they may be able to get Disabled Students’ Allowances grant to help pay the extra essential costs they have as a direct result of their disability. This could be things like specialist computer software, help with extra transport costs or somebody to help them take notes in lectures. What they can get doesn’t depend on your household income and won’t need to be repaid.
2. I have other children – is this taken into account?
Yes, you will be asked about your family as part of the application. You’ll be asked about other children who will be at university or college at the same time – depending on your circumstances, you could get more funding.
3. How is my household income assessed if I’m separated or divorced?
You will be assessed on the household income of the parent that the student is financially dependent on, this is usually the parent that the student lives with. Household income includes the income of that parent’s partner, if they have one.
4. What you need to do
If your child has not yet applied for finance yet they should do so now - the quickest and easiest way to apply is online at gov.uk/studentfinance, studentfinancewales.co.uk, saas.gov.uk and www.studentfinanceni.co.uk, depending on where you live. Applications take 6-8 weeks to process so you should apply as early as possible.
If your child is applying for the basic Maintenance Loan that doesn’t depend on your household income, you won’t need to do anything to support your child’s application. But if they’re applying for the part of the Maintenance Loan that does depend on your household income, you’ll be asked to give us details of your income so we can work out how much money they can get. You can do this in three steps:
5. When students receive their funding
The Maintenance Loan is paid directly to them in three instalments in line with their term start dates. The first instalment is usually in September shortly after they’ve started their course, the second in the New Year and their final instalment around April time.
Once they’ve registered at uni, the Tuition Fee Loan will be paid directly to their university or college in three instalments at the start of each term, so they don’t have to worry about paying it themselves – the Student Loans Company will do it all for them.
6. How repayment works
The Maintenance Loan and tuition fee loan has to be repaid, but not until they’ve left university or college and their income is over the repayment threshold. The threshold and write off periods vary depending on where you live when you take your loan out.
The current repayment threshold is £25,000 a year in England, £2,083 a month or £480 a week and if they are earning under the threshold they won’t have to repay.
If they do earn over the threshold, they’ll repay 9% of anything they earn over £25,000. For example, if their income was £27,000 a year, they would repay approximately £15 per month. It doesn’t matter how much they borrowed - £30,000, £40,000 or £50,000, the amount they repay would stay the same.
7. Further facts you should know
- Student loans do not go on credit files and do not affect credit rating.
- Interest is charged on student loans from the day we make the first payment into their bank account or to their university or college, until the loan is repaid in full or cancelled.
- Your child needs to keep in touch with the SLC throughout study and afterwards. They must keep contact details up to date and complete an Overseas Assessment form if they intend to move abroad for more than three months.
- Student loan repayments won’t last forever. They’re cancelled 30 years after your child becomes eligible to repay – even if they haven’t repaid a penny. Their debt can’t be passed to anyone else.
Parents and students are encouraged to get up to speed on student funding and you can find out more about supporting your child or partner's student finance application: https://www.gov.uk/support-child-or-partners-student-finance-application
Student Finance England is hosting Facebook live sessions with a student advisor and answering questions on their dedicated social media sites over the summer. Visit: https://www.facebook.com/SFEngland/ to join the student finance conversation. You can also visit https://www.facebook.com/SFWales/ for students in Wales.
Student England England Parents Night films available at https://www.youtube.com/playlist?list=PL4wogSHG9Pv-p2Fd0dfFH_fDFV9cxYgP7