Transcript CULTURE CHANGE PROJECT - Netherhall Sixth Form

ARU Conference - Student Finance
Blair Campbell
Student Finance Information Team
06 March 2013
Objectives
• A sound understanding of student finance for 2013 and beyond
• Good grasp of repayment
• Discussion common areas of uncertainty and difficult questions
.... Have fun?!
A Student Finance Story
There are 4 types of student finance. 1 product for fees, 2 for living costs,
and 3 for disabled students or those with dependants. There are 2 types of
support that come from universities and colleges.
About 3 in every 4 students takes out at least 1 loan. Of the 2 loans, 1
depends on income (the maintenance loan) and 1 doesn’t, the tuition fee
loan.
The amount of support a student gets to live on depends on 3 or sometimes
4 things: (1) where they study, (2) what year of study they are in, and (3) how
much they or their parents earn. For bursaries and scholarships, it might also
depend on (4), what grades they get at A level.
Why is this important?
Top Google ‘Autocompletes’
When will student loan come through/when do I get paid?
When do I apply?
What will the interest rate be?
Will it affect my mortgage?
How do I apply if I am a parent/pregnant?
How do I find student finance contact details?
How and when is it paid off?
Student Finance in 2013/14
Key Points for 2013/14
• Maintenance Grant up by to £3,354 max
• Tuition fee loan and maintenance loan remain the same
• Continued transition to Gov.uk
• First year of part-time online applications
Tuition Fee Loan
Maintenance (Living Cost) Support
Scholarships & Bursaries
Additional Support
www.practitioners.slc.co.uk
www.practitioners.slc.co.uk
• Up to £9,000 per year
• £6,750 part-time
• Maximum loan depends on fee charged
• Optional - take all, part or none of fee loan
• Average fee in 2012 was £8,657
www.practitioners.slc.co.uk
www.practitioners.slc.co.uk
• The majority of the maintenance loan will be available to all students. 65% of
the total loan is Non Means Tested.
(Not based on household income)
• The amount of maintenance loan available will be linked to where
a student lives and studies while in higher education.
www.practitioners.slc.co.uk
Student living away from home, outside London 2013/14
Household
Income £
Maintenance
Grant
Maintenance
Loan
Total
£25,000 & under
£3,354
£3,823
£7,177
£30,000
£2,416
£4,292
£6,708
£35,000
£1,478
£4,761
£6,239
£40,000
£540
£5,230
£5,770
£42,611
£50
£5,475
£5,525
£42,875
£0
£5,500
£5,500
£50,000
£0
£4,788
£4,788
£60,000
£0
£3,788
£3,788
£62,125 & over
£0
£3,575
£3,575
www.practitioners.slc.co.uk
www.practitioners.slc.co.uk
Disabled Students Allowances (DSAs)
For students with disability, mental-health condition or specific learning
difficulty. Not affected by household income, based on need.
Childcare Grant (CCG)
Up to 85% of actual registered/approved childcare. Maximum of: £148.75
per week for one child, £255 per week for two or more children.
Parents’ Learning Allowance (PLA)
Help with course-related costs for students with dependent children.
Amount received will be between £50 and £1,508.
Adult Dependants’ Grant (ADG)
For students with a partner or another adult who is financially dependent
on them (cannot be an adult child). Maximum grant is £2,642.
www.practitioners.slc.co.uk
www.practitioners.slc.co.uk
• Nothing to pay until earning at least £21,000 (£1,750 pm) gross.
• Full time students repay from April after graduating from/leaving their HE
course. (After 2016, if earning over £21,000)
• Part time students begin to repay April 4 years after they started their course.
(If earning over £21,000)
12_13
• Repayments are 9% of income over £21,000, deducted automatically by
HMRC.
www.practitioners.slc.co.uk
• If income falls to £21,000 or below repayments will be suspended
• Remaining loan balance cleared 30 years after entering repayment process
• No penalties will be placed on early student repayments
• A student loan is very unlikely to affect your ability to get a mortgage
(The Council for Mortgage Lenders)
12_13
• Mortgage lenders are most interested in your spare monthly income (‘ability to
repay’)
www.practitioners.slc.co.uk
Income each year before tax
Income from which 9%
will be deducted
Approximate Monthly
Repayment
£21,000
£0
£0
£25,000
£4,000
£30
£30,000
£9,000
£67
£35,000
£14,000
£105
£40,000
£19,000
£142
£45,000
£24,000
£180
£50,000
£29,000
£217
£60,000
£39,000
£292
!
Any outstanding loan balance will be cleared 30 years after
entering repayment.
www.practitioners.slc.co.uk
There will be a variation in the interest rate attached to a students loan during
study and when earning following graduation:
During study until
entering repayment
Earnings:
Below £21,000
Interest rate is:
Retail Price Index (RPI) +3%
Interest rate is:
Set at RPI Only
Earnings Between:
£21,000 - £41,000
RPI plus some amount
between 0% and 3%
Earnings:
Above £41,000
Interest rate is:
Retail Price Index (RPI) +3%
www.practitioners.slc.co.uk
Student Loan Interest
Current RPI Interest 1.5%
5.00%
4.00%
3.00%
2.00%
1.00%
Student Loan Interest
0.00%
Gross Income
www.practitioners.slc.co.uk
www.practitioners.slc.co.uk
!
Gross Income
Old System
Monthly Repayment
New System
Monthly Repayment
£16,000
£1
£0
£18,000
£16
£0
£21,000
£39
£0
£24,000
£61
£23
£27,000
£84
£45
£30,000
£106
£68
£33,000
£129
£90
£36,000
£151
£113
Repayment for thresholds for existing students up from £15,000 to
£15,795, and will rise again to £16,365 this April
www.practitioners.slc.co.uk
Example 1
Old System Student
• 3 year course, £3,000 a year fees
• £4,000 a year maintenance loan
• 25 year write off period
Example 2
New System Student
• 3 year course, £9,000 a year fees
• £4,300 a year maintenance loan
• 30 year write off period
Owes £23,000 at end of studies,
including interest
Owes £45,000 at end of studies,
including interest
Starting Salary of £24,000
Starting Salary of £24,000
Total Repayments = £35,500
Total Repayments = £22,000
Repay full balance in 24.5 years
Balance written off after 30 years
!
Assumptions: 2% salary growth, 3% average inflation. Based on a
report by HEPI on the Government White Paper, available here.
www.practitioners.slc.co.uk
!
Gross Income
Old System
Monthly Repayment
New System
Monthly Repayment
£16,000
£1
£0
£18,000
£16
£0
£21,000
£39
£0
£24,000
£61
£23
£27,000
£84
£45
£30,000
£106
£68
£33,000
£129
£90
£36,000
£151
£113
This year will see the first earnings linked rise in repayment
thresholds for existing students. Up from £15,000 to £15,795.
www.practitioners.slc.co.uk
www.studentloanrepayment.co.uk
www.practitioners.slc.co.uk
True – loan is written
off if you become
permanently unfit to
work through illness
True ororFalse?
injury
False – but you stop
making repayments
at any time you earn
under the threshold
False – you are still
eligible to make
repayments if
working abroad and
earning above the
threshold
False – but
payments
will stop
being
collected, if
unemploye
d/claiming
jobseekers
allowance
False – but repayments
will stop if earnings dip
below the threshold if, say,
www.practitioners.slc.co.uk
working part-time
False – there
was a pilot
project (RTL)
relating to this
between 2002 –
2004. It is
discontinued
True – the debt dies
with you, and no one
inherits it
False – becoming
bankrupt does not
write off your student
loan
True – or when
aged 65 if taken out
before 1st
September 2006
Websites and Further Info
www.gov.uk/studentfinance
www.sfengland.slc.co.uk
www.thestudentroom.co.uk/studentfinance
www.practitioners.slc.co.uk
Key Messages for Students
Do not be put off by perceived increase in cost
Research student finance, along with other UCAS/Uni information – identify challenges
Apply online, on time. Deadline 31 May
The future
Fees may go up (but so what?)
Maintenance support may go up
Could the government change the policy for current borrowers?
Could new governments change the system altogether?
Another Student Finance Story
Over 3 in every 4 students takes out at a tuition fee loan. Less than 3 in every 4 take
out living cost support. For those that do, loans make up less than ½ (or 1 over 2!) of
their income.
For students who do not take out a loan, there are 3 main reasons: Nearly 2 in every
5 choose not to because of a dislike/concern about debt, and 1 in every 3 because of
a concern about repayments. The rest felt they did not need the money.
There are 4 groups who are significantly less likely to take the loan: (1) students from
professional families, (2) foundation degree students, (3) students living at home, and
(4) NHS funded students.
2 groups of students are significantly more likely to take out a loan – those from a
routine/manual work family background and those from lone parent familes.
Data from Parliament Briefing Paper 29 November 2012
Blair Campbell
[email protected]
www.practitioners.slc.co.uk