Student Loans from the government: how do they work?
Student Loans are there to help with the costs of higher education. They’re issued by Student Finance Direct, a service managed by the Student Loans Company in partnership with local authorities and the government.
The interest on Student Loans is linked to the rate of inflation, so in real terms what you repay will be broadly the same as what you borrowed.
There are two types of loan available - you can take out either or both:
- a Student Loan to cover your tuition fees - called the ‘Student Loan for Tuition Fees’
- a Student Loan to help with your accommodation and other living costs - called the ‘Student Loan for Maintenance’
Student Loan for Tuition Fees
All eligible full-time higher education students entering higher education in or after September 2006 can get a Student Loan for Tuition Fees.
The loan will cover any amount up to the full amount you’re charged for tuition fees. For new students - and most who started in 2006/2007 - this means:
- up to £3,145 in 2008/2009
- up to £3,070 in 2007/2008
The Student Loan for Tuition Fees is paid directly to your university or college by Student Finance Direct.
Student Loan for Maintenance
The Student Loan for Maintenance is there to help towards your accommodation and other living costs while you’re studying. The maximum loan for 2008/2009 is £6,475. For 2007/2008, it’s £6,315.
Student Finance Direct will usually pay the money into your bank account in three instalments - one at the start of each term.
How the Student Loan for Maintenance works
All eligible full-time students can get a Student Loan for Maintenance, but the exact amount you can borrow will depend on several factors - including your household income, where you live while you’re studying and whether you’re in the final year of your course.
It’s also affected by any help you get through the Maintenance Grant (though not the Special Support Grant).
Working out whether you can get the maximum loan
You can take out around 75 per cent of the maximum Student Loan for Maintenance regardless of your household income - this is called the 'non income assessed' part of the loan.
Whether you get the remaining 25 per cent - the 'income assessed' part of the loan - depends on your household income.
If you’re an eligible student doing a full-time higher education course, you can take out a Student Loan for Tuition Fees to cover your tuition fees and a Student Loan for Maintenance to help with your accommodation and other living costs.