Student funding: Avoiding the financial minefield

Radical changes this year to student funding mean that there are big differences between England, Scotland and Wales. So how are students to choose their courses? Gwenda Thomas reports

Now that England, Scotland, Wales and even Northern Ireland are taking their own paths on student funding, and every university has put its own slant on bursaries, finding the best place to study is becoming as much a financial as an academic minefield for full-time students.

There are a few areas where the whole of the UK still agree: no up-front fees; all students can take out a loan to cover fees (graduate endowment in Scotland); all UK students are entitled to a student loan - how much will depend on family income; government grants will be given to students from lower income families; pay-back on money borrowed will be at the same rate across the UK based on 9 per cent of salary earned over £15,000.

But that is where the common policies end and you have to look at the detail.

England

The era of top-up fees is upon us. English universities can charge variable fees of up to £3,000 a year and most are asking for the full whack. You can now take out a loan to cover fees that doesn't have to be paid off until you graduate.

Maintenance grants of up to £2,700 will be given to students from low-income families. These will be paid on a sliding scale depending on family earnings with those earning £17,500 or less receiving the full amount and students from families earning £37,426 or above receiving nothing.

A student's main source of maintenance income will be the student loan - currently £4,405 (£6,170 if studying in London and £3,415 if living at home). But 25 per cent of this will be means-tested against family income. Those receiving a maintenance grant will find their loan entitlement reduced by the amount of grant they receive.

So far, the system is the same whatever university in England you choose. But the Government has stipulated that universities in England wanting to charge the full £3,000 a year fees must provide a £300 bursary for students on the maximum Government grant - in other words, very-low-income families. But most universities have taken the opportunity to offer their own bursaries to attract students, and there are some fantastic bargains about which can make a real difference to a student's income. The average bursary is thought to be £1,000.

Here is a taster of what's on offer and some of the anomalies to be found in the bursary business.

During clearing, Brunel is offering scholarships of £2,000 to anyone who is the first person in their family going to university. That's in addition to bursaries of £200-£300 for those on state grants and £3,000 scholarships if you have AAA at A-level.

There's a chance of winning an iPod Nano at Bradford during clearing, on top of a bursary of £500 growing to £900 by your final year, for those receiving a maintenance grant.

Support at Bristol for students on a full grant starts at £1,100 a year. A local postcode could earn you a further £1,000, and the brightest and best can pick up a welcome £2,500.

Gloucestershire is giving all students £200 just for joining. They also offer a 20 per cent reduction on fees to anyone who pays for the full three-year course upfront - a saving of £1,800. Up to £1,300 is given to students from "financially challenged" families at Leeds. Everyone who signs up at Liverpool Hope University receives a guaranteed minimum of £400 rising to £1,000 for those on a full grant and £2,000 if you have three As at A-level.

Maximum granters will get a whopping £2,700 bursary from Imperial College London - more still if they have three straight As at A-level. London South Bank has taken a very egalitarian approach, having dropped means-testing altogether. Everyone receives a bursary of £2,250 spread over three years.

Whereas students receiving a government grant will find their loan allowance cut by the amount of their grant, this is not the situation with university bursaries. It's generally a case of extra cash in hot, sticky hands. So though you will find universities talking loftily about offsetting fees, they will not have that kind of control. Will bursaries help reduce student debt? I doubt it. But students may find life and living a lot easier.

Scotland

Scottish students studying in Scotland are the envy of all. No fees to pay while studying and a modest graduate endowment of about £2,200 to pay off when they graduate, for which they can now take out a student loan.

A slightly lower non-refundable maintenance grant of up to £2,455 is given to students from low-income families on a sliding scale, with families earning £17,940 or less receiving the full amount and a family income cut-off point of £31,775.

The maintenance loan in Scotland is allocated in a totally different way to anywhere else. The upshot is that parents are expected to contribute rather more than in other parts of the country, and student debt is a lot less.

There is a maximum maintenance loan of £4,300 (£3,405 if living at home) and a minimum loan of £850 (£560 if living at home). Entitlement is on a sliding scale depending on income. Students, where the family income is around £55,000 or more, receive only the minimum. Loans will also be reduced by the amount of grant students receive. An additional loan of up to £560 is available for younger students from families where the income is below £20,225.

English students studying in Scotland...

Yes, they do pay fees, but only £1,700 a year (£2,700, if studying medicine), while the funding they receive (loans and grants) follows the English model. Before you race for the border, there are three points to consider: first, Scottish degrees take four years, rather than three as in England, so a year's extra fees and loan will be added to your debt; second, Scottish universities do not have to give any bursaries and very few do; third, fares to and from Scotland can be high.

Scottish students who decide to leave their native soil...

You will be hit the hardest, with likely fees of £3,000 a year, and a maintenance bursary and loan that follows the Scottish pattern. If studying in London, the maximum loan available will be increased to £5,305, but that is well below the £6,170 a year of your English counterparts. Scottish students will be eligible for any bursaries at an English university and can claim for the cost of three return journeys home to Scotland a year plus term-time travel.

Wales

For the first time, Wales are doing their own thing. The Welsh Assembly has decided not to bring in top-up fees until next year. So all students starting a course of study in Wales this year will pay the same fees as existing students - that's £1,200 a year and a loan can be taken out to cover this. In all other respects, funding will be similar to that in England except there will be no university bursaries on offer at Welsh universities this year.

Next year, the ways divide. From autumn 2007, fees will go up to £3,000 a year. But Welsh students who study in Wales will receive a £1,800 tuition fee grant from the Welsh Assembly. So, they will still be paying the old fee of £1,200 a year for which they can still get a loan.

This tuition fee grant will not be available to students from outside the principality who study in Wales, or Welsh domiciled students who study in other parts of the UK. A Welsh National Bursary set at £305 will be given to all non-Welsh students receiving a maintenance grant, studying at Welsh universities.

Northern Ireland

They have always followed the English funding model. The only difference this year is that a more generous maintenance grant of up to £3,200 a year will be given to students from lower income families.

Comparing fees is a guide to likely future debt, but it is by no means a perfect one.

If you're seeking a place, it's important to get your priorities right: the course should be the deciding factor. Only if there are several universities with similar offerings should you let the financial inducement affect your decision - that's if you can afford to take the academic high ground. The trouble is, not all students can or will. Who can blame them?

Bursaries in kind

Bursaries in kind rather than, or in addition to, cash-in-hand are being offered at some institutions to students from lower income families. Here are a few examples:

Ravensbourne College of Design and Communication is offering laptops to enable access to IT for all students, plus full travel costs to students from the Greenwich borough.

Southampton Solent University students who live in halls can expect an accommodation voucher of £250.

Barking College is giving £200 travel and materials bursaries. Even part-timers can apply. At Wirral Metropolitan College an extra £100 will be available to mature students with childcare responsibilities and lap-tops for full-time students.

London's Royal College of Music is offering a £520, nine-month, two-zone travel card to students from lower income families who miss out on the full state grant.

The Arts Institute at Bournemouth will be giving up to £300 towards bus travel cards, and up to £150 towards bicycles.

(Source: Trotman Information Services)