Is Your Child Applying for Student Loans? Here’s How to Support Them

Contents

1. Higher education costs in the UK
2. Student finance – the basics
3. UCAS and student finance
4. Are student loans hard to get?
5. Applying for student loans – step by step
6. Applying for student loans from each constituent country
7. Implicit parental support

Applying for financial support as a student in the UK can be complicated and confusing at times. The best way to make the process as simple as possible is to get familiar with the process, eligibility and deadlines ahead of time. 

Check out our helpful student finance guide and let us answer all your burning questions. 🙋

Higher education costs in the UK

Tuition fees are part and parcel of the student experience for young people in the UK today. So, you may be surprised to learn that between 1962 and the 1990s higher education in Britain was effectively free, as the state paid students' tuition fees and offered maintenance grants on top. 

Tuition fees were first introduced across the entire United Kingdom in 1998 to fund tuition for undergraduate and postgraduate students at universities – students were required to pay up to £1,000 a year for tuition. Since then, we have seen tuition fees steadily increase with yearly fees at the average university now costing £9,250 for an undergraduate degree. 💷

Furthermore, research from personal finance comparison site finder.com revealed that the UK is the fifth most expensive destination for students to study in the world – according to their figures, UK students are paying a staggering four times more than their European counterparts. 

The British political system and COVID-19 have also made their mark on the student experience in the last few years.

So, with higher education expenses at an all-time high, understanding the UK’s student finance system, what support may be available for you and how to tackle applying for student loans is more important than ever. 

Student finance – the basics

Student Finance is the official government funding you can apply for in order to pay for your university tuition fees or living costs while studying. The financial support is backed and regulated by the government and administered by a different student finance body depending on your location. 

UK universities are among the best in the world but there are some differences between studying in England, Scotland, Wales and Northern Ireland when it comes to applying for student loans – most notably, students living in Scotland choosing to study full-time at a Scottish university or college do not have to pay tuition fees.

There are some fundamentals that apply to all constituent countries, however. Student finance in the UK can be simplified and split into three main strands: 👇 

• Tuition Fee Loans

Tuition Fee Loans cover the full cost of your course, are paid directly to the course provider and are not repayable until after your course, when you’re earning above a certain level.

• Maintenance Loans

Maintenance Loans can be applied for at the same time, lending you money at the start of each term (or monthly in Scotland). Maintenance Loans are partly means-tested. Everyone eligible can get some of it regardless of their financial situation, but to get the full allowance, you'll need to declare household income.

Maintenance Loans are paid directly to the student’s bank account and are not repayable until after your course when you’re earning above a certain level.

• Maintenance or Special Support Grants 

Maintenance Grants are available to help with living costs, they’re means-tested and paid directly to your bank account at the start of each term. Maintenance grants are not repayable but any funds you get will reduce the Maintenance Loan you can get.

Students applying for student loans can also apply for Special Support Grants if they’re eligible for certain benefits, disabled, or need help with childcare costs. The amount you would get is the same as the Maintenance Grant, but it will not reduce the Maintenance Loan you can get.

UCAS and student finance

The Universities and Colleges Admissions Service (UCAS) is a UK-based organisation whose main role is to operate the application process for British universities. With a database of almost every UK University and course, UCAS manages all key information about your current education and university applications in one place online. 

In most instances, if you are planning to study at a university in the UK you will need to make your application through UCAS. If you are applying for student loans, you should submit your application through the relevant student finance body as early as possible. This might mean applying before you have a confirmed place at university or college via UCAS. 🧑‍🎓 

Are student loans hard to get?

How are students applying for student loans in the UK? And is it difficult to do? Whether you qualify for student finance will depend on your university or college, your course, if you’ve studied a higher education course before, your age, and your nationality or residency status. 

Thankfully, any UK or EU citizen can apply for a tuition fee loan to study at a UK university as long as they have been living in the UK or EU for the past three years with citizenship or pre-settled status. More detailed eligibility criteria and easy-to-follow online application portals can be found on the GOV.UK website. ℹ️

Applying for student loans – step by step

You should be applying for student loans and grants as early as possible to make sure you get your student finance in time for the start of your course. Applications for student finance open in the spring before your course starts.

You can apply as late as nine months after starting your course but we wouldn’t recommend this as it will mean self-funding in the first instance – especially given the four to six week processing time required. Remember, you will need to reapply for funding each year of your course. ⌛

The general application and repayment process follows seven easy steps. These simple steps will take you right through from deciding which strands of financial support to apply for to repayment after graduation.

• #1 Check eligibility

Most students in the UK are eligible to make an application for student financial support. Whether you qualify for student finance will depend on your university or college, your course, if you’ve studied a higher education course before, your age and your nationality or residency status.

The eligibility criteria vary slightly between constituent countries so you will need to check the website of the relevant funding body for exact details. 📍

• #2 Crunch the numbers

Find out exactly how much money you are eligible to receive. Remember, when applying for student loans, there are three types of funding available – Tuition Fee Loan, Maintenance Loan and Maintenance or Special Support Grants – each with slightly different criteria, deposit and repayment arrangements. 

The maximum support you will receive is also dependent on whether you are a new full-time student, a continuing full-time student, a part-time student, an EU student, or a student who started before 1 September 2012. 

Make use of the student finance calculators available via the relevant student finance body websites and find out how much you will repay at this stage too. 🧮

• #3 Prepare application

Applications for student finance open in the spring before your course starts. We recommend starting as early as possible to make sure you receive support before the start of your course. Make sure you have the correct ID available – preferably a valid UK passport but failing that, your original birth or adoption certificate will be required. 

If you have applied for a Maintenance Loan or a Maintenance or Special Support Grant then your parent will need to support your application with evidence. They will receive an email with a link to create an online account or log in. From there they can provide information about their income in the previous tax year and send supporting evidence. 🛂

• #4 Apply online

Applications for student financial support are made online via the appropriate student finance body – Student Finance England (SFE), Student Awards Agency Scotland (SAAS), Student Finance Wales (SFW) or Student Finance Northern Ireland (SFNI). Remember, it can take up to six weeks for your application to be processed. 💻

• #5 Update details

If you have made your student finance application early in the year, you may find that you need to update your applications as plans change in the intervening months between submitting and starting at university or college. 

Your student finance account will need to be kept up to date for the duration of your study period with new applications for loans and grants required every year.

Applying for student loans is an ongoing process and it’s important that you keep your details up to date. If you change your course through clearing or where you're going to live – perhaps you decide to stay living at home rather than move into halls of accommodation – you just need to log in to your student finance account and make the updates online. ✍️

• #6 Create an SLC account

When you stop studying the Student Loans Company (SLC) will automatically create a student loans repayment account for you. You will need to make sure that your contact details are up to date in your repayment account. The login details will be the same as for your student finance account. 🔒

• #7 Repayment

Repayments will depend on which plan you are on and which part of the UK you live in. As detailed on the SLC website, Plan 1 is applicable for all students including those English or Welsh students who began their course on or before 1 September 2012. Plan 2 is applicable for English or Welsh students who started an undergraduate course after 1 September 2012. 

Remember, Maintenance or Special Support Grants are nonrepayable and Tuition Fee and Maintenance Loans will expire after 30 years. You will need to let SLC know if you leave the UK for more than three months or change your employment details. Knowing the applicable repayment details will help you to navigate the repayment process when you graduate. 💰

Applying for student loans from each constituent country

According to Statistica, in 2021, students graduating from English universities will have incurred an average of over £45,000 of student loan debt, compared with £27,600 in Wales, £24,700 in Northern Ireland and around £15,200 in Scotland. 🇬🇧

We recommend referring to GOV.UK, UCAS student finance pages and the relevant funding body websites for the latest information. In the meantime, as the process of applying for student loans differs slightly between constituent countries, we have broken down some of the details below. 

• England

Applications for student financial support are made through Student Finance England (SFE). You can use the student finance calculator to see what finance you may be eligible for. 

The Tuition Fee Loan is paid directly to the university whereas Maintenance Loans or Special Support Grants are paid directly into your bank account at the start of the term. Both loans are repayable and the Maintenance Loan is part means-tested, the grants are nonrepayable. 🏴󠁧󠁢󠁥󠁮󠁧󠁿

• Scotland

Applications for student financial support are made through Student Awards Agency Scotland (SAAS). You can use the funding calculator to see what finance you may be eligible for. 

If you live in Scotland and choose to study full-time at a Scottish university or college, you will not have to pay tuition fees. However, you will need to apply to SAAS to have your tuition fees paid for you, as this is not automatic. Maintenance Loans or Special Support Grants are means-tested and paid directly into your bank account on a monthly basis. 

Scottish students who wish to study elsewhere in the UK will be charged the standard tuition fees for their chosen course provider but may apply for a loan to cover the costs through SAAS. 🏴󠁧󠁢󠁳󠁣󠁴󠁿

• Wales

Applications for student financial support are made through Student Finance Wales. 

The Tuition Fee Loan is paid directly to the university whereas Maintenance Loans or Special Support Grants are paid directly into your bank account.

All eligible students will receive £1,000 a year for accommodation and living costs. Students may also be eligible for an additional means-tested maintenance grant. Students who do not receive a full grant will also be able to apply for a Maintenance Loan. This is repayable and the amount depends on where you will be living. 🏴󠁧󠁢󠁷󠁬󠁳󠁿

• Northern Ireland

Applications for student financial support are made through Student Finance NI. 

For students who live in Northern Ireland and choose to study at a Northern Irish course provider, the maximum tuition fee is capped and they can apply for a Tuition Fee Loan to cover this cost. Likewise, if they choose to study elsewhere in the UK, they may apply for a tuition fee loan, but the costs will be higher. This loan is repayable.

Maintenance Loans are paid directly into your bank account at the start of the term. Both loans are repayable and the Maintenance Loan is means-tested. Maintenance or Special Support Grants are also means-tested. You can apply for either grant but not both, so check which is best for you. ☘️

Implicit parental support

In recent years various media outlets and online funding advisors have called for more transparency around the implicit expectation that parents will contribute financially to their child’s university or college costs. 🎓

As the Maintenance Loan is means-tested and based on ‘household income’, the amount you receive is directly related to your parent's income. If you are a high-income family then, when applying for student loans, you will not be eligible to receive the full amount based on the assumption that your parents are in a position to make up for that shortfall via their own income.

Thankfully, the Government has accepted this needs to be made clear to students and parents and the SLC has agreed to update its website accordingly in time for when you apply for student finance 2022/23 academic year. Martin Lewis at MoneySavingExpert has also created a bespoke calculator to help you determine just how much your parents may be expected to contribute to your higher education.  

Of course, the amount of money your parents feel they are able to contribute to your overall costs is a matter for them to decide, some parents refuse to support student finance at all, but at least if they understand what amount is expected then you can have an open conversation with your family, create a budget and agree on how to approach applying for student loans together. 🤝