Students unable to manage finances

Today’s students are set to graduate with £20,000-worth of debt, as too many head to university unable to manage their own finances.

Two pieces of research published today indicate how the rising cost of living, and general ignorance about how much things costs, is hitting students where it hurts – in the wallet.

The first, from the National Union of Students (NUS), in association with HSBC, found that too many students head to university unaware of the basic costs of living and unable to manage their own money.

The UK’s largest ever survey of student finance, published today on Push.co.uk, reveals that students who started at university last year can expect to owe over £17,500 by the time they leave and new students should reckon on nearly £4,000 more than that.

 

The annual survey by Push, the UK’s leading independent resource for prospective students, has found that student debt now tops £4,500 for each year of study – a hike of 9.6% since last year. 

 

The Push Student Debt Survey is the most detailed annual analysis of students’ financial position and this year’s is the largest to date, involving face-to-face interviews with over 2,000 students at 136 university campuses throughout the UK......

The average yearly debt was highest in England at £4,729, where students are now charged £3,145 a year in fees.

It was second highest, at £3,453, in Scotland - where contributions from students who live in Scotland were abolished in February 2008.

In Wales, the level of student debt had fallen by 3% to an average of £4,021.

But debt was lowest in Northern Ireland at £3,061 where students face the same tuition charge as in England.

Rates of student loan The maximum loan amounts for 2008/2009 are shown in the tables below. All students can apply for 75% of the loan and the other 25% is means-tested.

You will also receive less during your final year and less if you choose to live with your parents, the rates for 2008/2009are:

Living in parental home Living away from parental home Full year loans £3, 580 £4,625 Final year loans £3,235 £4,280

The above amount may be reduced by up to 25% following the means test.

Repaying the Student Loan

You will not have to start repaying your loan until the April after you have finished your course. The amount you repay will be linked to income, you start to repay once your income reaches £15,000. If  for any reason your income falls below £15,000 you will not have to make any repayments until your income rises above it. The Inland Revenue will work with the Student Loans Company (SLC) to collect repayments which will be taken directly from your wages. The table below gives examples of monthly repayments based on earnings:

 

Please note, any outstanding balance will be written off after 25 years.

 

Gross Income

Monthly Repayment Up to £15,000 0 £17,000 £15 £19,000 £30 £21,000 £45 £23,000 £60 £25,000 £75

If you’re a new entrant to higher education in 2008/2009, this page will help you work out how much you could get through the Maintenance Grant or Special Support Grant. It also gives you an idea of the total help you could get with living costs through the Maintenance Grant and Student Loan for Maintenance combined.

The maximum grant is £2,835. The full grant is available to full-time higher education students who:

• are new entrants to higher education in 2008/2009, and
• have a household income of £25,000 or under

Working out how much you’ll get for 2008/2009

New students with a household income of £60,005 or under will get at least a partial grant. Exactly how much is available depends on your household income - check the table below for an idea of what you’ll get.

Household income Amount of grant  Up to £25,000  Full grant - £2,835  £30,000  £2,002  £35,450  £1,260  £40,000  £998  £50,000  £524  £60,005  £50  More than £60,005  No grant

Tony Blair has scraped home by just five votes in a crunch House of Commons test of his controversial plans to introduce university top-up  fees.

The Higher Education Bill was backed by 316 votes to 311 after days of intense campaigning by ministers and rebels.

Students who graduate this summer expect to have debts of at least £10,000 - an increase of £6,700 compared with 1999's graduates, a survey suggests.

Being able to pay off their debts after graduation was a major worry for 40% of the 2,000 students in England and Wales questioned.

On 5th July 2007, the Secretary of State for Innovation, Universities and Skills, The Rt Hon John Denham MP, announced major changes to the support that full-time higher education students living in England from the academic year 2008/09. 

The minimum threshold (of family income) for a full maintenance grant will be extended from £17,500 a year to £25,000 a year; with a partial grant available up to an income threshold of £60,000.

It is expected that around two-thirds of all eligible students in England entering higher education in the 2008/09 academic year will be entitled to a full or partial non-repayable Maintenance Grant.

Once the system is fully up and running, this means that around 100,000 extra students per year will receive a grant. Students will generally need to find less cash to support themselves while they are studying.......

You may be able to get a bursary or scholarship from your place of study on top of student loans and grants from the government.

If you qualify, you should apply as soon as you have a confirmed place on your course.

Some universities and colleges administer their own bursaries and scholarships – for others, Student Finance Direct handles applications. Search for your university or college on the UCAS website to find out who you should apply to.

On the main application for student finance, Student Finance Direct asks for permission to share your application details with your university or college if necessary. If your university or college handles their own scheme, giving your consent allows them to use this information to assess what you’re entitled to.

If you don’t consent, you’ll need to provide this information to your university or college directly.

• Search for information on bursaries on the UCAS website (opens new window)
• Bursaries, scholarships and awards

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