How Do Student Loans Work in the United Kingdom?
Just before you enroll to a university of your choice you may be ruminating about two things that will influence greatly the success of your academic endeavors and life after school. The first is the choice of degree course to pursue, and the second is finding out responses to the question, how do student loans work? These two aspects are important for first time applicants as well as continuing students in UK universities.
Well, the first thing that you should know is that student loans in the UK are often administered by the student loan finance. This is actually a government funded agency which administrates on all matters of application and disbursement of loans to both first time applicants as well as continuing students.
Full time students who are continuing students apply for the loans each year at the close of the academic year. Generally, the student loans awarded to majority of students cater for two major needs, tuition costs and the cost of living. As the name suggests, tuition loan will basically cover the costs of tuition and book expenses while the maintenance loan will cater for accommodation, food, and travel expenses.
The amount of funding that students receive in each academic year depends on such things as the household income, their place of residence, and the universities in which they study. So it is not unusual to find students enrolled in prestigious universities receiving greater funding that their counterparts in middle level colleges or public universities.
Full time students in UK universities are also eligible to apply for a maintenance grant to help them meet costs of living. The grant is non-repayable and targets individuals whose household income is less than £50,020 in a year. The amount of grant that is awarded to students is normally adjusted annually and for the 2010/2011 academic year, students received £2,906 and this will also apply to the forthcoming year 2011/2012.
The question of how do student loans work can be answered best by looking at the administration of some of the popular student loans. There are at least three types of loans that you can choose from and these are private school loans, federal student loans, and federal parent loans. The first type of loan is private school loans which are often unsecured and their disbursement is based on the credit history of the applicant. It caters for all educational costs from tuition fees to upkeep.
On the other hand federal student loans are issue by the government through its student loan agency. These are often subsidized and students who are awarded these loans pay much lower interest rates than individuals who take conventional loans. Upon graduation, students whose loans have matured are given a grace period of 6 months after which they are required to start repaying the loan.
To be considered for the above loans, interested student applicants must satisfy the eligibility requirements of the lender. In general, the loans can only be awarded to resident students who are citizens of the work. The applicants are also required to have lived in the UK for 3 years prior to the time of loan application, and they should be enrolled in a college which qualifies them to be awarded either a bachelor’s degree, diploma, or certificate in a particular field of study.