The interest on Student Loans is linked to the rate of inflation, which means that in real terms the amount of money owed will be broadly the same as what was borrowed.

Levels of Borrowing

The amount of cash available is mainly based on the residual income of an individual, or of their parents.

An applicant may choose to have their income assessed or, if married, have their joint income with their spouse assessed to determine how much loan is available to them.

Alternatively, if their parents earn a certain amount of income, they are expected to contribute towards the education costs. Parent income will be assessed by their Local Education Authority (LEA), taking into account pension contributions and anything else that is relevant. In addition:

• If the parents of a student are separated, then the LEA will decide as to which of their parents' incomes is to be assessed. In most cases it is the parent with whom the applicant lives with most of the time.

• If the parents of a student separate during the academic year, then entitlement is proportionally calculated, taking into consideration the length of time and income when they were together, and the time and income of one since the separation.

• If the parents decide to remarry or have a cohabiting partner, their joint income will then be assessed.

Part-time students

Part-time students are not subject to any regulations on how much universities or colleges can charge in tuition fees. Students are advised to check with their university/college to see how much they charge and find out how much the fees are likely to rise over the length of the course.

Part-time students are also able to apply for Grants. The amount of grant available is based on the intensity of the course, household income and the area of the UK where the student is based. The maximum amount ranges between £500 and £1,125.

Loan Types

There are two types of loan available to students in the UK :

• A loan to cover tuition fees - the ‘Student Loan for Tuition Fees’
• A loan to cater for a student’s living expenses – the ‘Student Loan for Maintenance’

Some students may also be entitled to a maintenance and special support grant, which can help pay for some, if not the majority of the tuition fees.

Tuition Fees Loan

This loan allows students to borrow enough to cover the full amount of their tuition fees. This amount is usually paid directly to the university/college, meaning less hassle for the individual. (See Tuition Fees section for more information)

Maintenance Loan

A loan to take care of living costs is available to every full-time student under the age of 60, except for students in Scotland , where it is under 50.

The loan is paid in three instalments at the start of each term, with the amount received depending on two factors: the ‘Guaranteed’ bit, which every applicantreceives, and the ‘Income Assessed’ bit which depends on the assessment of an applicant’s (or their parents’) residual income.

Maximum Loan

Students are often advised to always borrow the maximum student loan available each year, even if such an amount isn’t required. By taking out the full amount, students can ensure that whatever is left over can be used to cater for their following year of education and cut out the need for applying for a more expensive type of borrowing at a later date.

Another reason for taking the full amount of student loan, which is a form of cheap debt, is that the extra money can be invested in a top rate Savings Account (as these may pay more interest than the loan costs) to avoid spending it and making it possible for students to effectively keep the facility open for cheap borrowing after graduation if needed.

Tuition Fees

Student tuition fees help cover the costs of running a university or college, including staff salaries, buildings maintenance and other resources.

The cost of tuition fees and how students are expected to pay for them is dependent on the individual’s university, the type of course, the date at which they start their course and where in the UK the university/college is based. Maximum tuition fees will also vary depending on personal circumstances.

In terms of paying for the fees, a contribution to the cost of a student’s tuition has to be paid by the student, their parents, or their Local Education Authority (LEA).