Student Loans

What are Student Loans?

Student Loans are designed to help students bear the living costs associated with studying. The Government supported scheme allows students to take out a loan to fund living maintenance and tuition fees.

Student loans are becoming more and more popular as the cost of higher education is constantly increasing.

Like with any loan offering student loans have to be repaid, but unlike other loans the repayment mechanism is driven by how you earn after studying. Individuals do not start paying off their loan until they start earning £15,000 a year. It is only at this point payments are deducted from their monthly salary.

The actual calculations are based on 9% of earning over £15,000. For example someone earning £18,000 per year would only pay 9% of £3,000 which equates to £5.19 per week. The payment structure in place means the more the individual earns the more repayment is made resulting in earlier payment of the loan.

Student loans are the one of the cheapest loans available as they are based on a growth rate in line with inflation. Students can mount up to sizable loans when students graduate, however a student loan seems to be the only sensible method of borrowing available at present.


Who offers Student Loans?

The student loan programme is offered through a public sector organisation that is called The Student Loans Company (SLC). The company is responsible for offering financial services such as loans and grants to students across England, Northern Ireland, Scotland and Wales. The Student Loans Company will work with local authorities and the Department for Education and Skills.


How to Apply for a Student Loan?

In the first instance any individual must make an application to the local authority but if you live in the below areas you will need to contact the SLC customer support office.

• London Borough of Brent
• Darlington Borough Council
• London Borough of Hackney
• Hartlepool Borough Council
• North Yorkshire County Council
• Redcar and Cleveland Borough Council
• South Tyneside Council
• Southend-on-Sea Borough Council
• London Borough of Southwark
• Stockton-on-Tees Borough Council
• York City Council

From September 2007 the Government will plan to introduce some new changes such as increase in loan amount for full time students and part time students and the mandatory requirement of the NI Number in all payouts on loan instalments. Once you have completed your application for a student loan you can expect to wait for around 6-8 weeks before you here what financial support you are to be offered.