1.How much can you borrow?
- The maximum tuition fee loan is £9250 for full time students and £6935 for part time students.
- The maximum maintenance loan is £11,354 but this is only applicable if you are living in London away from the family home. Most students will be eligible for about £3000 per term.
2. How much interest will you be charged?
You’ll be charged interest on the loan from the day your first payment is made to you, until it’s been repaid in full or cancelled. The interest will be calculated daily and applied to the amount you owe each month. The interest rate is based on RPI and will vary depending on your circumstances, as follows:
While you are studying, interest is charged from the moment you take out the loan. The rate is RPI + 3%
- For Full-time students, this rate is charged up until 6th April after you finish or leave your course.
- For Part-time students this rate is charged while you’re studying and until whichever of the following dates occurs first: 6 April after leaving your course or 6 April four years after the first day of the first academic year of your course.
After studying, the interest rate will be based on your income as follows:
• £25,000 or less = RPI
• between £25,001 and £45,000 = RPI plus up to 3%, depending on income
• over £45,000 = RPI plus 3%
Warning: do not underestimate the impact of the interest on the amount you owe. Currently it is averaging c6% in total. This has a compound effect as 6% is charged every year from the point you borrow the money. It is charged on both loans.
If for example you borrow £18,000 each year, for 3 years (£54k), by the time you graduate you will owe £71,000 because of the interest.
Once you graduate, the loan will grow by 3-6% each year. You will need to be earning over £50k before you even start paying off the actual capital.
3. Repaying the loans – when and how much?
If you started a full-time or part-time undergraduate course on or after 1 September 2012, you will be on Repayment Plan 2.
If you’re a full-time student you’ll be due to start repaying your loan in the April after you finish or leave your course. If you’re a part-time student, you’ll be due to start repaying your loan in the April after you finish or leave your course or the April four years after the first day of your course (even if you’re still studying), whichever comes first.
You’ll only start making repayments when your income is over £25,000 a year, £2,083 a month or £480 a week. If your income falls below this, repayments will stop and only re-start when your income is over the threshold. You can also make additional voluntary repayments to SLC at any time.
You’ll repay 9% of your income over £480 a week, £2,083 a month or £25,000 a year. If your income changes, either rising or falling, your repayment amounts will automatically change to reflect this.
So for example, if you earn £33,000 p.a, your monthly repayments will be £60.