Since 2012 student finance has changed considerably for UK students. Tuition fees have risen to £9,000 a year and in some institutions they’re even as high as £9,250. To make matters more concerning, there is constant media coverage on whether the UK Government will re-cap course fees at an absurdly high £12,000 a year.
Furthermore, since these initial changes to tuition fees, grants have disappeared, and students are primarily supported by their maintenance loans, parental support, and their own ability to generate an income whilst studying. It’s important to be aware of these changes, complicated as they may seem, as new students need to be equipped if their options were to change again. In order to help your children in the best way possible, here are some things parents need to know about student finance.
Student Finance England (SFE) deal with the allocation of loans and your application. The Student Loans Company (SLC) deal with the repayments when you graduate. It’s important to remember these differences as it can get confusing!
Whereas the UCAS deadline is the 15th of January each year, the dates Student Finance England (SFE) recommend to apply by change yearly, and are dependant on when your child's course begins.
If the student’s course starts between 1 August and 31 December 2018, the government advice is to apply for funding by 31 May 2018. Furthermore if the course begins between 1 January and 31 March 2019, the advice is to apply by 30 September 2018. There are full details available on this on the www.gov.uk website.
It is important to be aware of the specific “apply by” dates on the government website as this is essential to ensuring that that your child's funding is secured before they begin their degree. The date for courses beginning in September is usually around the end of May, but it is wise to be prepared as applications beyond the given date can encounter administrative delays to the allocation and release of funding.
It is also important to understand the process of the application and avoid some common issues that cause delays. We've put together some tips to show you how you and your child can keep delays to a minimum during this process:
Being aware of these points and understanding their implications will help to avoid delays in the application process. It will also ensure that they receive their instalments by the time their academic year is due to start.
Whilst your child is away at university, it is worth being aware of your of how your own change of circumstances can affect your child's funding. If you find your income changes significantly, you must be prepared to declare your changes in a Current Year Assessment Form. This will make sure your child's funding is allocated in accordance to your circumstances, and they even may be eligible for more or less maintenance loan support. The SFE website states that if a parent's income in the tax year is likely to be at least 15% lower than in the tax year two years previously, they can assess the household income on what the estimated income will be.
Moving away from the initial SFE application process, how would a parent financially support their child whilst at university? Is it wise to pay their loan for them? How are loans repaid and when do repayments come into effect?Paying tuition fees upfront on behalf of the child isn't necessarily more financially beneficial. Being clued up on the intricacies and details of your child’s loan, and more importantly the repayments, could help your child avoid some potential pitfalls.
We've detailed some advice on financial support, loan repayments, how interest is accrued and calculated, and if taking a student loan will impact your child's financial future:
For any graduates on Plan 2, the new repayment threshold for student loans will be £25,000 a year, £2,083 a month or £480 a week (correct as of May 2018 from the SLC advice). The loan now only begins to be deducted at salaries of £25,000+, where as previously this was fixed at £21,000.
For Scottish and Northern Ireland students on Plan 1, student loans will begin deducting on or £18,330 a year, £1,527 a month or £352 a week. Although this may allow graduate students time to adjust to adult life and become financially independent before paying off their student debt, it is important to be aware that changes can occur in relation to loans.
Being aware of the more complex financial implications in regard to repayments and interest rates is a beneficial way of assisting your child through university.
If you knew these points already, this is great news. If you didn’t, we hope you can see how ensuring you and your child are well informed on the processes, expectations, and deadlines of Student Finance England and the Student Loans Company, is vital to securing student funding each academic year. Student Finance in the UK can appear confusing to parents, especially when there is the potential for more changes to tuition fees, maintenance loans, and threshold repayments. Using these points we have raised, you can become educated and aware of how SFE and SLC work and how you can help you child use their services effectively.
Student Loans Company https://www.slc.co.uk
Student Finance England https://www.gov.uk/student-finance-register-login