Funding for Higher Education

Student Loans and Consolidation

The two main costs for college or university students are living expenses and tuition fees. For these burdens there are loans and grants available so those facing a financial struggle need not totally dispair however at some point in life it may become an attractive offer to consolidate student loans. However the increasing burden of student debts is always in the media and there is an inbalance increasing that the government is beginning to address which has been growing since grants were abolished. Since universities were allowed to set their own tuition feeds the problem has simply worsened.

Most students will take out a loan to cover their costs at University or College but this can saddle an individual with debts that may make life difficult after entering full time employment, or require repayments for decades to come. Repayments do only start however once full time education is completed, and once a student is earning more than £15,000 per year. The repayments are made through tax and are linked to the person's earnings therefore the lower the salary the lower the repayments.

In 2005-2006, student loans of up to £4,195 per yr are available (£5,175 for students studying in London, and £3,320 for those living at home), and three quarters of students are eligible. The other quarter have to depend household income. In September of 2006 these rates will be raised above the rate of inflation. The interest rate on student loans is normally 0%, but linked to inflation unlike normal bank loans whose rates are often so high that consolidation becomes a very attractive offer.



In September 2004, students that came from lower income households became eligable for a Higher Education Grant of a maximum of £1,000 per year, which is non-repayable. And from September 2006, students from poorer families will also be eligable for an income-based grant of up to £2,700 a year, which is also non-repayable.

Applications for funding are made through your location authority (formerly LEA) if you are in England or Wales. Those in Scotland contact the Student Awards Agency (SAAS) and those in NI have the (ELB). Through the submitted forms your LA will determine what you are elligable for. It is the Student Loans Company who actually deals with all loans and they will inform you in writing how much you are entitled to and what each installment will be.