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Financial Support for students entering

Higher Education in 2009

Fees, Loans & Bursaries

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Some thoughts on the current situation

HEFCE research says there is no evidence that Tuition Fees and Loans have put students off applying to university, both in overall numbers and from students from lower income families.

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•DIUS had estimated that in 2007-08, 30% of students at university would be on a full maintenance grant. In fact the final figure was 40%. This suggests that there was a significant increase in the proportion of students from low income families getting into university.

•However, as a result of this, DIUS changed the income thresholds for entitlement to a maintenance grant for 2009. These are now less generous.

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4However•Students may be making the decision to live at home and go to a local university, because they are worried about levels of debt.

•More significantly this may prevent students from applying to the ‘selecting’ universities, particularly if they live in some regions.

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5Parents•There is evidence that they are much more concerned than students about the levels of debt.

•There may be considerable pressure from parents for students to stay at home whilst at university

•We need to Educate Parents

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Credit Crunch and rising unemployment

•Who knows what effect this will have on the decisions that students (and parents) make.

•One thing is that probably more students will be eligible for full Grants and Bursaries. However this will have cost implications for government

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7The key thing is:

The amount of loan that students are prepared to take out and their MISCONCEPTIONS about how much it will cost in repayments

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Financial Support for students entering

Higher Education in 2009

Fees, Loans & Bursaries

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• Tuition Fees and Tuition Fee Loans

• Maintenance Grants

• Maintenance Loans

• University and College Bursaries

The Main Package

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10Tuition Fees

• Universities can charge full-time undergraduates fees of up to £3,225 per academic year

• Fees can vary between courses and universities (in reality, virtually all Universities will charge the full £3,225)

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• Fees no longer have to be paid whilst the student is studying

• A Tuition Fee Loan is available• Tuition Fee Loan is paid direct to the

University by Student Finance Direct• You only start paying back the Loan

after you have finished your course and are earning over £15,000 per year

Tuition Fee Loan

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• Not means tested• Does not depend on your Parents’

income• Available to all students

Tuition Fee Loan

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• Means Tested (depends on your Parents’ income)

• Doesn’t have to be repaid• Paid in three instalments per year

Maintenance Grantof up to £2,906

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• This is based on:– Gross taxable income (before tax) of

resident parent(s) / partner(s) / step parent(s)

– LESS deductions for payments into pension funds and £1,050 for each other dependent child in the household

– Any income of older brothers or sisters living at home is NOT taken into account

Means Testing

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Household Income Level of Grant

Up to £25,000 £2,906

From £25,000 to £50,000

Partial grant between £2,906 and £50

£50,000 or above Nil

Maintenance Grant 2009Income Thresholds

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16What this means for studentson EMA

• £30 – you should be entitled to the Full Grant

• £20 – most of you will be entitled to the full Grant, however some might get just a very little less

• £10 – this is a guess, but most of you would probably get at least £2,000 Grant

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• To help with living and study costs

• At least 75% is available to all students, the other 25% is means-tested

• Paid directly to the student

• Paid in three instalments per year

Maintenance Loan

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2007 Means TestedMaximum(Minimum is 75% of this)

Max if receiving more than £1260 Grant

Living away from home in London Max - £6,928 £5,668?

Living away from home outside London

Max - £4,950 £3,690?

Living at home Max - £3,838 £2,578?

Maintenance Loan RateFor students starting university in 2008

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If:• Student receives the full grant of £2,906and:• University or College is charging fees of more

than £2,906then:• University or College must provide a minimum

non-repayable Bursary for any fee amount above £2,906

• Most are offering more than this minimum mandatory Bursary

University and College Bursaries

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20Very ImportantStudents When you fill in an application for a loan you

will be asked “Your university may be offering financial

rewards such as bursaries or scholarships to its students. Do you consent to your information being shared with your university specifically for bursary administration purposes?”. . . . .Yes / No

I strongly suggest you answer “Yes”

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21Very ImportantParents When you fill in the form to support your son’s

or daughter’s loan application, you will be asked a very similar question

Again I strongly suggest you answer “Yes”

In other words that you are happy for your financial information to be shared with the university for bursary administration purposes

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22Examples of Bursaries

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23Oxford Bursary Scheme

(info from their Website)

Income range Maximum available

£0 – £17,500 £4,000

£17,501 - £22,499 £3,000

£22,500 – £37,425 £2,500

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24Other Bursaries

UCL£25 - £2,500 (depending on parental income)

Leeds£300 - £1,300 (depending on parental income)

Buckinghamshire£500 to Every student (regardless of parental

income)

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25Scholarships

BrunelAchievement Scholarships150 scholarships available, worth up to £3,000 per year

to students from under-represented groups, who achieve a minimum of 300 UCAS tariff points

Regional Partnership Scholarships25 scholarships available, worth up to £3,000 per year

to students from under-represented groups, who attend schools in one of the six West London Boroughs (including Brent)

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• Tuition Fees (up to £3,225)

• Tuition Fee Loan (up to £3,225)• Maintenance Loan (up to £6,928 for

students studying in London and living away from home)

• Maintenance Grants (up to £2,906)• Guaranteed Bursary for students

receiving the £2,906 maintenance grant

Summary

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• Tuition Fee Loans and Maintenance Loans added together

• Repayments start upon leaving course and earning over £15,000 per year

• Repayments are collected through PAYE• Repayment rate is 9% of earnings above

£15,000 a year *

Repayment Arrangements

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• How does the amount of loan you take out affect your repayments?

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29Repayment Arrangements

Continued

• Monthly repayments are the same even if you don’t take out the full Loan you are entitled to. It is the repayment period which will vary.

• “Broadly” any outstanding balance is written off after 25 years

• Additional early repayments can be made

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30Interest on your Loan

•Interest on your loan is charged at the rate of inflation (in fact the rate of inflation in March of the previous year)

•However there is a clause which says that if the average base rate of the 11 major banks (plus one percent) is lower than the inflation rate for the previous March, then the interest you pay will drop to that level

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• Student who has finished University and is earning £18,000 pa.

• Will pay 9% of £3,000 in a year = £270

• Monthly = £22.50

• Weekly = £5.19(Take home pay after Tax and NI = £280 a week)

Repayment Example 1.

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• Student who has finished University and earning £24,000 pa.

• Will pay 9% of £9,000 in a year = £810

• Monthly = £67.50

• Weekly = £15.58 (Take home pay after Tax and NI = £365 a week)

Repayment Example 2.

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33Repayment Example 3.

• (Lucky) Student who has finished University and earning £40,000 pa.

• Will pay 9% of £25,000 in a year = £2,250

• Monthly = £187.50

• Weekly = £43.27(Take home pay after Tax and NI = £587 a week)

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34Case Studies

Depends on whether, while you are at university, you will:

• Live at home and study in London• Live away from home and study in London• Live away from home and study outside London

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35Case Study A

• Student A has a household income of £25,000. Their University is charging Fees of £3,225. They will be studying in London and living at home.

• Student A should receive• Maintenance Grant £2,906• Maintenance Loan £2,578 (£3,838 - £1,260)• University Bursary (possibly) £2,000?• Tuition Fee Loan £3,225• Total £10,709 per year of course

• Total Loan to repay £5,803 per year of course £17,409 for 3 year course

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36Case Study B

• Student B has a household income of £25,000. Their University is charging Fees of £3,225. They will be studying in London and living away from home.

• Student B should receive• Maintenance Grant £2,906• Maintenance Loan £5,668 (£6,928 - £1,260)• University Bursary (possibly) £2,000?• Tuition Fee Loan £3,225• Total £13,799 per year of course

• Total Loan to repay £8,893 per year of course £26,679 for 3 year course

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37Case Study C

• Student C has a household income of £25,000. Their University is charging Fees of £3,225. They will be studying outside London and living away from home.

• Student C should receive• Maintenance Grant £2,906• Maintenance Loan £3,690 (£4,950 - £1,260)• University Bursary £2,000?• Tuition Fee Loan £3,225• Total £11,821 per year of course

• Total Loan to repay £6,915 per year of course £20,745 for 3 year course

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38Case Study D

• Student D has a household income of £50,100. Their University is charging Fees of £3,225. They will be studying outside London and living away from home.

• Student D should receive• Maintenance Grant £0• Maintenance Loan £3,712 (75% of Max Loan)• University Bursary £0 (unlikely to get a Bursary)• Tuition Fee Loan £3,225• Total £6,937 per year of course

• Total Loan to repay £6,937 per year of course £20,811 for 3 year course

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• Apply online at www.direct.gov.uk/studentfinance

• Examples of info that might be required:– National Insurance Number– Birth Certificate/Passport– Income details for student and household– Student’s bank account details

How to Apply

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Are there any Questions?

......can I answer them???