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What is student finance, how much is it & what does it cover?

Student finance can be confusing to get your head around, and it isn’t always easy to get everything you need to know in the right place.

When you’re planning ahead it’s important to know what options are available to you, how you can finance your studies, and when you’ll need to start repaying any debt. 

So, here’s everything you need to know about what student finance is.

Everything you need to know about student finance

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What are tuition fees?  

Tuition fees are the fees that universities charge for each year of study at their institution.

These fees vary depending on what part of the country you are studying in and where you are from.

For example, universities in England can charge up to £9,250 per year, whereas Scottish students studying in Scotland can study for free.

As different universities can charge different fees, you should always check with your specific university to see how much you will be paying and whether there are any exemptions. 

What is student finance? 

The most common way for students to cover the costs of going to university is by taking out a student finance loan.

These loans can cover your tuition fees as well as covering some of your living costs.  

There are two main types of loans that most students can apply for, although some exemptions exist for international students. 

You’ll need to apply for these loans every year that you study, and you can use these loans for the duration of your course, plus one extra year.  

  • Tuition fee loans cover your tuition fees. These are sent directly to your university and are used to pay for lectures, seminars and equipment. You won’t need to deal with tuition fee loans until after you graduate.

  • Maintenance loans will cover some of your living expenses while you’re a student. The exact amount that you receive will vary depending on your circumstances. Where you’re from, how much your parents earn, and where you’ll be studying are all considered, so those who need extra help can get it. However, it’s rare for maintenance loans to cover all your expenses, so you’ll most likely need a way of making or saving money for yourself.  

Who can claim student finance? 

If you’re a UK citizen who has been settled in the country for three years before the start of your course, you’re eligible for student financial support if you’re studying a Bachelor’s or undergraduate degree, a foundation degree, a certificate of higher education, DipHE, HNC, HND, an initial teacher training course, an integrated Master’s degree, or a pre-registration postgraduate healthcare course. 

If you’re studying part-time, you may still be eligible for financial support.

However, you will need to be completing around 25% of your course every year to be eligible.

There are also some course restrictions, so be sure to check and see if your course is eligible.  

If you’re not a UK resident, you can still claim some financial support, but this will vary depending on your circumstances. 

For example, Irish and EU citizens beginning a course in the 2020/21 academic year will be able to call on a tuition fee loan, but not a maintenance loan. 

You may need to go through a different application form depending on your nationality, so be clear on what you need to do to apply for funding support. Don’t be discouraged, though!

There are plenty of ways of making ends meet, so be sure to check what options are open to you with your university. 

When do you start repaying a student loan? 

You won’t be paying for your loans upfront, and you’ll only start repaying your loans after you’ve graduated.

The total amount you will be paying back will vary based on how many years you studied for and the total amount will be the combined amount of your tuition fees and maintenance loans.

For every year that the loan is unpaid, a 5.6% interest rate is applied, so your final amount will increase slightly every year. 

However, it’s important to note that you’ll only begin repaying this once you’ve crossed an earning threshold of £27,295 a year. If you stop earning or your earnings fall below this amount, you’ll stop paying.

This means that some many students won’t pay off the whole of their loan during their lifetime, although many do.  

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How can you save money as a student? 

The majority of costs students face daily are small things like books, transport, food and drink, and other hidden surprises.

Although these might not come across as expensive at the time, they can build up. Especially when some of your larger costs, such as rent, are due around the same time. 

This is why planning and budgeting are so important. While you won’t be able to predict every cost, you come across, having a way of looking clearly at your finances can help you save money. 

There are plenty of banking and saving apps that have budgeting features to help you break down your spending, and these can be very useful for setting budgets, putting your money in the right place, and saving.  

Even so, many students find themselves falling just a little bit short every month, and while there are some quick and simple ways to keep hold of your money, there are few better ways to earn money than by getting a part-time job.

In fact, as many as 74% of students have found an additional job to top up their incomes.  

How can parents support students? 

One of the most common ways for a student to seek financial support is by turning to family. 

The true amount of student finance that students will receive depends on their parents' incomes, and parents will need to provide evidence of their earnings during the process of applying for student finance. 

Most maintenance loans don’t cover the full cost of students’ living expenses, and unfortunately, regardless of the individual circumstances facing parents, they’ll usually need to contribute in some way. 

Parents can support their students through things like standings orders that help keep students’ finances topped up.  

If parents cannot support their children through university, it’s important that they provide evidence of their income during the student finance application.

This will ensure that the student receives the most amount of support possible. 

Besides financial support, parents could also help with shopping and generously lending any leftover utensils and white goods to their children for use.

They might not necessarily put more money into their student’s pockets, but home comforts can make a nice change when on a tight budget. 

What other support is available? 

One of the most common ways that banks will support students is through an overdraft.  

This isn’t free money though, so be careful how you use it. Once you graduate, you will need to start paying back your overdraft if you haven’t already. 

Gap years are also very popular with students looking to build up some cash before or even during their studies.

Some students can take time out before their studies begin or even take an additional year during their studies. 

However you do it, working can help you build up your money quickly – as long as you don’t spend it all that is. 

Beyond the traditional way of financing your studies, there are also several additional scholarships, bursaries and emergency funding options available if you need them. 

For example, organisations such as turn2us offer charitable bursaries that don’t have to be paid back.

Alternatively, if you’re a disabled student in need of support, there are also Disabled Students’ Allowance (DSA) grants that are non-repayable and can be used to help pay for anything from a non-medical helper to equipment and expenses. 

Being a student isn’t easy, but if you’re looking for a financial advisor to help you plan your finances, you can find an expert on Unbiased.  

If this article is relevant to you, it might also be helpful for you to know more about financial coaching. What is a financial coach? We’ve got the answers.

If you're struggling to cope with the financial strains of university, our article on hardship funding for students might be of help, too.

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About the author
Kate has written for leading publications and blue chip companies over the last 20 years.