New Student Finance Help for Low Income Applicants

Student finance has been a major news story in recent months. Changes to the way in which university education is funded have caused major controversy and a lot of anger.

Many people are concerned about the increased cost of going to university. But if you are from a lower-income background, you should remember that there is financial support available to you.

Haven’t student fees gone up?

Yes. Following the coalition government’s adoption of elements of the Browne review, student fees are increasing. From the 2012-13 academic year, universities or colleges will be able to charge tuition fees up to a maximum of £9,000. This is a big change when compared with the previous year’s fees – which were just £3,375.

If you have already started your course by 2011-12, you will not have to pay the higher fees in your next year; the new schedule only applies to those starting in 2012-13.

The changes to tuition fees have caused a lot of anger – as evidenced by, amongst other things, the large protests seen in London and across the country. But, while the new fees will almost certainly put some people off going to university, it is important to remember that help is available for those on lower incomes – and that university will remain free at the point of entry.

Can I get a bursary?

In theory, universities can now charge as much as £9,000 a year in tuition fees. But there are certain conditions attached to this. Universities that increase their fees above £6,000 will have to show that they are taking extra steps to aid entrance by those from lower income backgrounds.

One of the key conditions will be that these universities will be required to offer bursaries under what is known as the National Scholarship Programme (NSP). Students with a household income of less than £25,000 will be entitled to some form of support under this Programme. This could come in the form of a bursary, reduced fees, or a range of other types of support.

The details of the NSP are yet to be fleshed out, and there has been some criticism that universities will be able to set their own criteria for support. If you think you might be entitled to a bursary, you should contact your university directly.

What about Maintenance Loans and Grants?

Maintenance Loans and Maintenance Grants are still available. All students can apply for a Maintenance Loan, although the amount you receive will depend on things like your household income and whether or not you are living at home.

A Maintenance Grant will be available if you are a full-time student, your household income is less than around £50,000 (the exact threshold for 2012-13 is yet to be announced). The Grant is ratcheted down depending on your household income, and the maximum grant is available only to those with household incomes of less than £25,000. Again, the exact amount you will receive is yet to be announced.

You do not have to pay back Maintenance Grants – but you do have to pay back Maintenance Loans.

What has happened to repayments?

The government has also made changes to the way in which loans are repaid. According to them, the new system will be fairer and easier for those on low incomes.

Under the new system, you will begin to pay back your Maintenance Loan and Tuition Fee loan once your annual income exceeds £21,000. This only applies to those who start their course after September 2012; those who begin a course before this will still begin to repay once their earnings reach £15,000.

You will repay your loans at a rate of 9 per cent of your earnings. After 30 years, any outstanding debts will be written off. Again, the government claims this is an improvement on the current write-off period of 25 years.

Student finance is a complicated area – and it is one that could have a major long-term impact on your personal situation. If you are confused, you should take advice from your local Connexions office, a careers advisor, or your university.