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Student Loans

Last updated: 30th March, 2012

Student Loans are the definitive lifeline to young people ready to embark on university life.  Fresh out of college or sixth-form with only a few pennies saved from part-time jobs, these gargantuan offerings are, for most, the only way of funding the expensive business that has become higher education.

However with the increase in tuition fees to £9,000 for the first time in 2012, and the evaporation of many work opportunities in the current economic climate, can you afford to take yourself into a mountain of debt?  We examine the ups and downs of the student loan, and what you are really taking on.

It’s important to keep in mind that you will need to supply your student bank account details when applying for a student  loan. This is why the student bank accounts ask for a certain amount of money to be deposited every few months to keep the account open along with the 0% overdraft. They want to make sure that are using their student account as your main account.

How much student loan can you get?

First of all it is important to find out what you are in fact entitled to.  There is no use pondering whether or not to take the jump, if you don’t know what is on offer.  To begin with, everyone is entitled to a loan of up to£9,000 to cover their tuition fees for that calendar year. You are then allocated a maintainance loan which aims to help cover such necessities as rent, food and probably a lot of drink.  This amount is determined by an evaluation of you and your family circumstances (like where you are living).

Many factors are considered, including salaries, mortgages and debt.  You will then be awarded a maximum figure – ranging from £4375 – £7675 – that you are entitled to per year dependent on circumstances.  The premise behind this is that lesser privileged families are unable to fully support their children’s academic studies, meaning that they require more of a helping hand financially.

This all sounds very complicated, but all your fears can be allayed with a quick phone call to a member of your local education authority, who will swiftly let you know how much support you can expect in the upcoming year. Alternatively you can take a look at the Save the Student! website which is number 1 for student money advice.

Paying back your student loan

I know what the pessimists of you out there are thinking, “So does this mean I will be in £35,000 of debt when I finish university?”  The straight answer is yes, but it’s not that simple.  For starters you only start to pay back the money owed once you have finished your course and are earning at least £21,000 per year and the interest rate remains fractionally small, even after the years that you leave university.

Should you take out a student loan?

For many of you, the question whether or not to take out a student loan is the same question as whether or not to go to Uni. The majority simply will not be able to afford the next three years without it.  So you really need to ask yourself, do you have to go to university?  For prospective Doctors or Nurses, Teachers or Architects this is a no-brainer, but for those of you on the fringes, you need to spend some time in making a calculated decision on your future.

The key to student loan is remembering that it is not your money. You have borrowed money for an investment, an investment in you!  You are paying for an education that has to guarantee you a better future or otherwise the investment is not worthwhile. By committing to a student loan you are essentially backing yourself to repay it with interest, the question is – are you worth the gamble?

By students

Hello! This website has been written by student money experts Save the Student! to give you an overview of student bank accounts and what they have to offer you.

The studentsWe review the benefits and catches of all student accounts so you can make an informed choice and avoid the traps!

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