Prospective students thinking about going to University may be confused about the whole loan and grant situation just like I was before I started so don't worry you aren't alone! They are both forms of money but they are based on and used in different ways.
This information is based on students from England but living outside London. Students from other countries of the UK as well as students living in London and students from other EU and non-EU countries may have different loan and grant amounts as well as people in many other situations such as people with disabilities, part-time students and students with children amongst many of the reasons.
There are two types of loan that students may be eligible for when at University which both have to be paid back once you have finished University and started earning money (a minimum of £21,000 per year hence why it is a loan). The Tuition Fee Loan gets paid directly to the University meaning you don't see a penny - this is the money that pays for you to be able to study your course. For full time students, the maximum amount that can be applied for is £9000 which is the maximum amount that Universities can charge for a course but this depends on how much your degree at your University of choice is. 25% is paid in term 1, another 25% is paid in term 2 and the remaining 50% is paid in term 3. My course is costing me (or rather the Government at the moment) £8750 per year, that's right, per year which is a lot of money. This means at the end your 3 year degree you'll be in a maximum debt of £27,000 and that's just from actually being able to study your course, never mind other fees!
The second loan that can be applied for is the Maintenance Loan which is basically used for living costs such as accommodation. This loan however is slightly different to the Tuition Fee Loan as the amount of money you get is based on your household income, in other words, how much your parents earn per year and your chosen living situation - whether you're going to be living at home or not whilst studying. This means that all your accommodation costs may not be covered which I discovered in my first year in halls meaning my lovely parents paid the remaining amount which I will be forever thankful for. 25% of the total loan is based on this with the remaining 75% not based on this meaning everyone is entitled to money. The maximum amount that can be applied for if living at home is £4418 (which is increasing to £4565 in September of this year) whereas the amount that can be applied for if moving into halls or student accommodation is £5555 (which is increasing to £5740 in September). This isn't a huge difference in money to say that moving away from home is a huge difference with bills and rent to pay.
For a student who decides to live away from home, the maximum the household income can be in order for a student to get the full Maintenance Loan amount is £50,791. For incomes that are higher than this, some of the Maintenance Loan is expected to be provided by the parents to the student meaning the student will only get part of the maximum loan amount. For a student who chooses to stay at home, the maximum the household income can be in order to get the full loan is £48,306. As above, this means that part of the Maintenance Loan is expected to be provided by the parents. The Maintenance Loan is paid three times a year at the beginning of each term, usually in September, January and April in equal-ish installments.
The Maintenance Grant is yet another way of getting money from the Government to pay for University fees. This money is provided for use on books, transport, food and other expenses (including shopping and going out for me!) However with it being a grant, it doesn't have to be paid back but any student that gets grant money has some money taken off their loan money. It is again based on household income: £25,000 a year or less means a grant of £3387; £30,000 a year means a grant of £2441; £35,000 a year means a grant of £1494; £40,000 a year means a grant of £547; £42,620 means a grant of £50; any yearly household income that earns more than £42,620 means no grant. This means that your parents are expected to pay for everything which is the case for me! Luckily I have some Maintenance Loan left over this year which is a big help, renting a house is much cheaper than halls! But luckily my parents give me a weekly allowance too which I am extremely lucky and grateful for. This allows me to make the most of my student experience. The Maintenance Grant is paid the same way as the Maintenance Loan is - at the beginning of each term.
Once you've finished your degree and are into a job that earns you over £21,000 a year (excluding tax) then repayments for your student loan will begin. If you change jobs or are without a job for any period of time then repayments stop until you are back in work and earning over £21,000 again. Earning £24,000 a year will mean £22 of your monthly wage will be used to repay back your student loan which is a tiny amount; earning £27,000 a year means £45 of your monthly wage is used to repay back loan money; £30,000 a year means £67 a month; £33,000 a year means £90 a month; £36,000 a year means £112 a month. Interest rates are also added from the day the Government pay off your first loan installment until it is fully repaid or your loan gets wiped off completely (which is after 30 years of finishing University).
Universities can also help with money but this different for every University throughout the country. Some allow students to apply for bursaries which will again be based on household income and maybe on the grades that helped you get into University. Scholarships may also be offered, including the University I go to, which is based on my A Level grades in my case which I just missed out on by a grade to my despair! Gutted was not the word when I found out! Bursaries and scholarships usually aren't required to be paid back.
All these loans means the maximum debt a student can be in after studying a £9000-a-year, 3 year degree course along with the maximum Maintenance Loan is almost £40,000! This is why deciding to go to University is a very important decision and should not be a rushed one either but in my opinion, it is a well worth-while experience. I plan on writing a post on the reasons why or why not you should go to University which may help you decide if University is right for you or not.
Do loans and grants confuse you? Does the debt after University not make you want to go? Do you think schools/colleges explain the whole loan and grant system properly when helping on making a decision about University?