Fears surrounding student loan debt are deterring potential students

Fears of how much debt they may be in following university is deterring prospective students from even considering university in the first place, and much of this is rooted in misconceptions. Here, we have dispelled some of these misconceptions.

Fears amongst current or potential university students surrounding the process of student loans can – and does – heavily deter prospective entrants from even considering higher education without proper information being given. Here, we’ll discuss common misconceptions and misinformation with regard to university fees, and the fact that you may not even have to pay a penny back whatsoever.

When faced with the potential £50,000 figure that is often floated, the idea of university doesn’t seem too appealing. However, the amount that it costs in Government funding to send a student to university is not the same as the amount that you may eventually have to repay. The repayment total is entirely dependent on the amount of money that you make after graduating, and that repayment doesn’t begin until you are earning over £27,295 (equivalent to £2,274 a month). With this, those who earn a lot following their degrees will pay a larger sum back; this operates on the premise that those who gain more from university – in terms of finances and employment – will give more back, and those who do not gain as much financially, do not owe as much back to the system from which they loaned the money in the first place.

As mentioned before, you don’t begin repaying your student finances until you are earning £27,295 per year. Following that, you will repay 9% of everything that you earn above that set amount. For example, if you are earning £30,000 per year; the difference between £27,295 and £30,000 is £2,705, and 9% of that is £243.45. You would pay £243.45 out of your £30,000 salary.

The amount is taken out of your monthly paycheck automatically, so there is no concern of missing a loan payment or being actively indebted to somebody, which is a common concern particularly amongst those who have dealt with those financial hardships previously. Alongside this, student debts are cleared either once you have repaid the full amount, or after 30 years from the April after you first graduate.

It is important to remember that the student loan systems are predominantly in place for your benefit, and in an effort to make entry and maintenance of a higher education more accessible. Where the prospect of having responsibility over such a large sum of money is daunting for many people, the issue is often that the loans do not cover the total costs that are involved with attending, living, and supporting oneself at university. If you do need extra financial assistance, there are options available to you through the welfare system. The only benefit support where student loans/grants are considered as income for means-tested benefits are: universal credit, income support, income-based jobseeker’s allowance, income-related employment and support allowance, housing benefit, and council tax support.

If you are in the Liverpool area, Big Help offer welfare advice appointments where you can get advice on eligibility for benefits and with applications.

Sources:

https://www.moneysavingexpert.com/students/student-loans-tuition-fees-changes/

https://www.turn2us.org.uk/Benefit-guides/Student-Support/How-does-student-support-affect-benefits