Back in November 2011 I attended a workshop about student finance at Birbeck College. It was a very useful event because I found out a lot about university tuition fees and student finance that I was not aware of before.
Luckily for people who are going to be going to university starting this year, repayment is based purely on income and is not dependent on the total amount of loan taken out.
- Old system: graduates repay their loan at the rate of 9% of what they earn above £15,000.
- New system: graduates repay their loan at the rate of 9% of what they earn above £21,000. In addition as the standard starting wages of graduates in England is between £18,000 and £19,000, this means that a large percentage of graduates won’t have to repay anything for the first few years or possibly even longer.
For example a £27,000 loan has a repayment rate of 9% and with the new system this means, the graduate will be paying £5.00 ONLY when their earning is above £21,000. Whereas for people who went to university in 2011 and had the old system, their repayment rate stays the same but they will have to pay £16.00 per week for the same amount of loan!
So actually the new system is not that much of a disadvantage to us because all graduates will pay less per month than they did under the old system and all outstanding repayments will be written off after 30 years.
In addition, there will be maintenance loans and grants available to help with general living needs/ necessities. The maximum maintenance grant for 2012 is £3,250 and you do not need to pay this back. However the maximum maintenance loan is £7,675 for people living away from home in London and this needs to be repaid along with tuition fee.