Beginner's Guide To: Student loans

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The Independent Online

If you're heading off to university this September, the chances are you will be using a student loan to meet your living costs and tuition fees. Do you know how much you can expect? Or what you'll pay? Read on for our simple guide to student loans.

What can I borrow?

Students starting their studies in September or January can borrow up to £3,225 for their tuition fees and up to £4,950 through a maintenance loan.

UK undergraduates automatically qualify for 75 per cent of that, while the remaining 25 per cent is means tested, so depends on your family's income.

Do I pay interest?

These loans are one of the cheapest forms of borrowing, as the Government subsidises the interest. The rate of interest you pay is set by inflation to make sure what you pay back is the same as what you borrowed.

When and how do I repay?

You won't start repaying your student loan until you're earning at least £15,000 a year and the amount you pay depends on what you earn.

Don't worry about setting up a standing order or anything – unless you pay self-assessment tax – your repayments will be taken from your pay like a tax before it reaches your bank account.

Your payslip will show what has been deducted and you should also be sent statements every year showing your outstanding balance and how much there is left to pay.

Is there any free help?

Many universities will have bursaries to help students from less well off families afford to study. There is also a government maintenance grant, or special support grant, of up to £2,906, which doesn't need to be repaid. However, if you qualify for this amount, it will reduce the amount you are eligible to borrow as a maintenance loan.

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