Understanding University Costs and Repayment Options in 2012

1. Can I afford to go to university in 2012? [See Power Point notes pages for more detail] 1

2. Tripling fees doesn't always mean tripling your costs In 2012 all institutions will be allowed to charge up to £6,000 Many will charge up to £9,000 providing they make extra provisions for bursaries for poorer students

3. You don't need cash to go to university Tuition fees will be paid automatically for you No repayments until April after graduation 3

4. Earn under £21,000 and never repay Repaid through the income tax system Repay 9% of everything you earn annually above £21,000 £21,000 threshold rises in line with average earnings 4

5. 30 year cut off for repayments Pay no more after 30 years have passed Regardless of what you still owe 5

6. Above inflation interest will be charged During study - RPI +3% Earning less than £21,000 - RPI + inflation Earning between £21,000 and £41,000 – interest rate gradually rises from RPI + inflation, up to maximum of RPI +3% Earn over £41,000 – RPI +3% 6

7. Current – 9% of earnings over £15,000 New – threshold £21,000, meaning lower repayments The following table will help to illustrate this Repayments £540 a year lower than now 7

8. Continued 8

9. You will owe for longer, and may pay a lot more Cost is spread over much longer period Initially graduates have more in their pocket Though later it's likely you'll have less as you'll still be repaying 9

10. Part time students Fees of up to £4,750 (6,750 with bursaries) No longer need to pay up front – eligible for SLC loans No Maintenance Loans/grants Criteria: first degree, studying 25%+ of full-time course 10

11. Monthly repayments the same Repay the same each month, whether £6,000 or £9,000 tuition fees & whether you take out the full maintenance loan or not Important implications to how much you'll repay in total 11

12. Loans also cover living costs Students can also take out maintenance loans Pay for living costs – food, books, accommodation, travel Usually 3 termly installments straight to your bank account 12

13. How much? Amount of maintenance loan is assessed by your household income (“means-tested”) and whether you decide to live at home or away from home All students are guaranteed up to 65% of total available The remaining 35% is means tested 13

14. Maintenance grants If the household income is below £25,000, the student gets the full grant of £3,250 Between £25,000 and £42,600, the grant is on a sliding scale Grants do not have to be paid back 14

15. Student loans DO NOT go on credit files Loan, credit card and mortgage providers only know you have a student loan if they choose to ask Impact on ability to get a mortgage in the future is limited

16. You may not be allowed to repay early May be penalised for repaying your student loan back early, especially as real interest is now being charged

17. Many people will never pay it all back It is estimated only 40% will ever pay back the full amount and these will only be the very top earners Likely many will repay the same on a 6,000 course as a 9,000 17

18. Think of it like a tax not a loan Why? Repaid through the income tax system Only repay if you earn over a certain amount Amount repaid increases with earnings Does not go on credit files Debt collectors will not chase it Bigger borrowing doesn't increase repayments Many will repay for the majority of their working lives 18

19. Financial support available (The following may be available as well as a maintenance grant) Fee waiver – a reduction of tuition fees Bursary – cash/gift in kind (grant/scholarship/living costs) Scholarship – like bursary, often depends on academic ability 19

20. Any questions? 20

21. Useful links www.studentfinance2012.com www.studentfinance-yourfuture.direct.gov.uk www.moneysavingexpert.com/students2012 21