Studying at university is not a cheap endeavour, with everything from tuition fees to living costs and travel to pay for. Without the additional help of a student loan, many of us would simply not be able to afford it but by operating separately from traditional loans and with many people in debt to their student loan provider for many years following their studies, it pays to understand exactly what you are agreeing to before you enter a deal.
What do I need to Apply?
To be accepted for a student loan, you need to prove who you are, where you will be studying and how much finance you currently have available. To do this, the following items should be at hand when filling out your application form:
- Your passport details
- Your national insurance number
- Your bank account details
- Information regarding your chosen course and institution
If you do not have a valid passport, you need to get your birth certificate countersigned by someone reliable who has known you for several years; this can include a local teacher, doctor, police officer or minister; essentially anyone with a professional qualification.
How do you Prove your Household Income?
If you are younger than 25 and live with family at the time of your application, their income will be assessed. If you are over the age of 25 and live with a partner, their income will be assessed instead. The more money your loved ones have, the more they are expected to assist in funding your studies and the less money you will qualify for. The Student Loans Company will directly consult HM Revenue and Customs to review the relevant financial records and determine whether or not you qualify for a loan. This also highlights the importance of being honest in your application, as any fraudulent claims will be discovered and your application disqualified.
What types of Loan are there?
There is no such thing as one, definitive student loan; it is split into a number of different parts that different people can and cannot apply for. Tuition fee loans help with the cost of the actual course and are paid directly to the university rather than the student. Maintenance loans help with day-to-day living by assisting with the payment of the likes of accommodation, food, books and clothing. There are also additional loans or bursaries sometimes available for people with disabilities, students who have been orphaned or those with young children of their own to support.
Is the Rate of Interest High?
Just like with traditional loans, you pay interest on what you borrow and even though the rate can change from year to year, it is generally between 1% and 2%, therefore considerably less than if borrowed from elsewhere.
Can I Avoid Repayments?
The money must be repaid but for current students in the UK, repayments will not start until they have graduated and are earning over £21,000 a year. A common myth suggests moving abroad will negate your repayments but this is not true. Not only will you still owe the money but you will often also be liable for any expenses incurred by the SLC trying to track you down. Your loan repayments will generally only be wiped if you die or become unable to work.
About the Author: This post was written by Gladstone Brookes. As a UK based PPI claims specialist, they have helped thousands of customers reclaim money from mis-sold Payment Protection Insurance policies, at a success rate of 87%. With over 28,000 clients so far this year alone, they are leaders in the fight to reimburse consumers with what they are owed.