Financial Support for students entering Higher Education in 2009

1. Financial Support for students enteringHigher Education in 2009 Fees, Loans & Bursaries

2. Some thoughts on the current situation HEFCE research says there is no evidence that Tuition Fees and Loans have put students off applying to university, both in overall numbers and from students from lower income families.

3. DIUS had estimated that in 2007-08, 30% of students at university would be on a full maintenance grant. In fact the final figure was 40%. This suggests that there was a significant increase in the proportion of students from low income families getting into university. However, as a result of this, DIUS changed the income thresholds for entitlement to a maintenance grant for 2009. These are now less generous.

4. However Students may be making the decision to live at home and go to a local university, because they are worried about levels of debt. More significantly this may prevent students from applying to the ‘selecting’ universities, particularly if they live in some regions.

5. Parents There is evidence that they are much more concerned than students about the levels of debt. There may be considerable pressure from parents for students to stay at home whilst at university We need to Educate Parents

6. Credit Crunch and rising unemployment Who knows what effect this will have on the decisions that students (and parents) make. One thing is that probably more students will be eligible for full Grants and Bursaries. However this will have cost implications for government

7. The key thing is: The amount of loan that students are prepared to take out and their MISCONCEPTIONS about how much it will cost in repayments

8. Financial Support for students enteringHigher Education in 2009 Fees, Loans & Bursaries

9. Tuition Fees and Tuition Fee Loans Maintenance Grants Maintenance Loans University and College Bursaries The Main Package

10. Universities can charge full-time undergraduates fees of up to £3,225 per academic year Fees can vary between courses and universities (in reality, virtually all Universities will charge the full £3,225) Tuition Fees

11. Fees no longer have to be paid whilst the student is studying A Tuition Fee Loan is available Tuition Fee Loan is paid direct to the University by Student Finance Direct You only start paying back the Loan after you have finished your course and are earning over £15,000 per year Tuition Fee Loan

12. Not means tested Does not depend on your Parents’ income Available to all students Tuition Fee Loan

13. Means Tested (depends on your Parents’ income) Doesn’t have to be repaid Paid in three instalments per year Maintenance Grantof up to £2,906

14. This is based on: Gross taxable income (before tax) of resident parent(s) / partner(s) / step parent(s) LESS deductions for payments into pension funds and £1,050 for each other dependent child in the household Any income of older brothers or sisters living at home is NOT taken into account Means Testing

15. Maintenance Grant 2009Income Thresholds

16. What this means for studentson EMA • £30 – you should be entitled to the Full Grant • £20 – most of you will be entitled to the full Grant, however some might get just a very little less • £10 – this is a guess, but most of you would probably get at least £2,000 Grant

17. To help with living and study costs At least 75% is available to all students, the other 25% is means-tested Paid directly to the student Paid in three instalments per year Maintenance Loan

18. Maintenance Loan RateFor students starting university in 2008

19. If: Student receives the full grant of £2,906 and: University or College is charging fees of more than £2,906 then: University or College must provide a minimum non-repayable Bursary for any fee amount above £2,906 Most are offering more than this minimum mandatory Bursary University and College Bursaries

20. Very Important Students When you fill in an application for a loan you will be asked “Your university may be offering financial rewards such as bursaries or scholarships to its students. Do you consent to your information being shared with your university specifically for bursary administration purposes?”. . . . .Yes / No I strongly suggest you answer “Yes”

21. Very Important Parents When you fill in the form to support your son’s or daughter’s loan application, you will be asked a very similar question Again I strongly suggest you answer “Yes” In other words that you are happy for your financial information to be shared with the university for bursary administration purposes

22. Examples of Bursaries

23. Oxford Bursary Scheme(info from their Website)

24. UCL £25 - £2,500 (depending on parental income) Leeds £300 - £1,300 (depending on parental income) Buckinghamshire £500 to Every student (regardless of parental income) Other Bursaries

25. Brunel Achievement Scholarships 150 scholarships available, worth up to £3,000 per year to students from under-represented groups, who achieve a minimum of 300 UCAS tariff points Regional Partnership Scholarships 25 scholarships available, worth up to £3,000 per year to students from under-represented groups, who attend schools in one of the six West London Boroughs (including Brent) Scholarships

26. Summary • Tuition Fees (up to £3,225) • Tuition Fee Loan (up to £3,225) • Maintenance Loan (up to £6,928 for students studying in London and living away from home) • Maintenance Grants (up to £2,906) • Guaranteed Bursary for students receiving the £2,906 maintenance grant

27. Tuition Fee Loans and Maintenance Loans added together Repayments start upon leaving course and earning over £15,000 per year Repayments are collected through PAYE Repayment rate is 9% of earnings above £15,000 a year * Repayment Arrangements

28. How does the amount of loan you take out affect your repayments?

29. Repayment ArrangementsContinued • Monthly repayments are the same even if you don’t take out the full Loan you are entitled to. It is the repayment period which will vary. • “Broadly” any outstanding balance is written off after 25 years • Additional early repayments can be made

30. Interest on your Loan Interest on your loan is charged at the rate of inflation (in fact the rate of inflation in March of the previous year) However there is a clause which says that if the average base rate of the 11 major banks (plus one percent) is lower than the inflation rate for the previous March, then the interest you pay will drop to that level

31. Student who has finished University and is earning £18,000 pa. Will pay 9% of £3,000 in a year = £270 Monthly = £22.50 Weekly = £5.19 (Take home pay after Tax and NI = £280 a week) Repayment Example 1.

32. Student who has finished University and earning £24,000 pa. Will pay 9% of £9,000 in a year = £810 Monthly = £67.50 Weekly = £15.58 (Take home pay after Tax and NI = £365 a week) Repayment Example 2.

33. (Lucky) Student who has finished University and earning £40,000 pa. Will pay 9% of £25,000 in a year = £2,250 Monthly = £187.50 Weekly = £43.27 (Take home pay after Tax and NI = £587 a week) Repayment Example 3.

34. Depends on whether, while you are at university, you will: Live at home and study in London Live away from home and study in London Live away from home and study outside London Case Studies

35. Student A has a household income of £25,000. Their University is charging Fees of £3,225. They will be studying in London and living at home. Student A should receive Maintenance Grant £2,906 Maintenance Loan £2,578 (£3,838 - £1,260) University Bursary (possibly) £2,000? Tuition Fee Loan £3,225 Total £10,709per year of course Total Loan to repay £5,803 per year of course £17,409 for 3 year course Case Study A

36. Student B has a household income of £25,000. Their University is charging Fees of £3,225. They will be studying in London and living away from home. Student B should receive Maintenance Grant £2,906 Maintenance Loan £5,668 (£6,928 - £1,260) University Bursary (possibly) £2,000? Tuition Fee Loan £3,225 Total £13,799per year of course Total Loan to repay £8,893 per year of course £26,679 for 3 year course Case Study B

37. Student C has a household income of £25,000. Their University is charging Fees of £3,225. They will be studying outside London and living away from home. Student C should receive Maintenance Grant £2,906 Maintenance Loan £3,690 (£4,950 - £1,260) University Bursary£2,000? Tuition Fee Loan £3,225 Total £11,821per year of course Total Loan to repay £6,915 per year of course £20,745 for 3 year course Case Study C

38. Student D has a household income of £50,100. Their University is charging Fees of £3,225. They will be studying outside London and living away from home. Student D should receive Maintenance Grant £0 Maintenance Loan £3,712 (75% of Max Loan) University Bursary£0 (unlikely to get a Bursary) Tuition Fee Loan £3,225 Total £6,937per year of course Total Loan to repay £6,937 per year of course £20,811 for 3 year course Case Study D

39. Apply online at www.direct.gov.uk/studentfinance Examples of info that might be required: National Insurance Number Birth Certificate/Passport Income details for student and household Student’s bank account details How to Apply

40. Are there any Questions? ......can I answer them???