Student finance 2012: the facts, not the politics
If you are writing on the back of the launch of the major new independent taskforce to fight student finance confusion, the following top facts from Martin Lewis may be useful:
- The changes ONLY hit new September 2012 undergraduates. The new maximum £9,000 tuition fees for full-time students are only for new 2012 starters. Existing students and 2011 starters stay on the current system, with fees at a maximum of up to £3,465.
- You don’t need the cash to go to university. Fees are automatically paid by a Student Loans Company loan. There are loans for living costs too.
- You only repay if earning over £21,000 & it wipes after 30 years. Full time students’ repayments start the April after graduation, taken by employers like tax (so no debt collectors chase), at a rate of 9% of everything over £21,000. If there’s debt after 30 years it disappears, so if you never earn over the threshold, you’ll never repay a penny.
- Repayments are £540/year LOWER than now. Current graduates repay 9% of earnings above £15,000. The new threshold’s £21,000 (which will rise with average earnings), so future graduates will initially have more disposable income.
- You will owe money for LONGER and may pay a lot MORE. Under the new scheme, as you repay less each year, the original debt’s bigger, and you pay higher interest, it’ll take MUCH longer to repay the loan than now.
- Monthly repayments are the same, whether fees are £6,000 or £9,000. The course fee size doesn’t impact monthly payments as they’re set at 9% of earnings above £21,000, although it could mean repaying more in total.
- Many will NEVER pay it all back. Many starting even on £25,000 salaries won’t repay all owed within the 30 years, meaning you repay for much of your working life. The slight silver lining is it means for many there’s no increased total cost by doing a £9k course than a £6k course.
This is a short summary; info and tables at www.moneysavingexpert.com/students2012