Grant aid to UK undergraduate students is a mainly a thing of the past - a fond memory perhaps. In its place there is a system of means-tested loans. The reasons for these recent changes are quite simple. The number of students enrolling for courses of university study has increased dramatically over the past ten years, yet the investment in universities has hardly changed in real terms. All indications are that an even greater proportion of the population will be required to undertake higher education in the future and so, in order to find the funds needed to equip universities for the next century, funding has been diverted away from the student and towards the institutions. The argument is that when students graduate, they obtain higher paid jobs and their income tends to rise faster than the average. Most starting salaries advertised for graduates in the UK in 1998, for example, were between £12 000 and £16 500 pa, and their salaries tended to rise more quickly. Income for graduates recruited in 1995, for example, rose by 12 per cent within a twelve month period, compared to just 3.7 per cent for all full-time adult employees, and so the government is able to argue that students attending courses of study at university are making personal investments in themselves. The government is also reasonably optimistic about recovering the debt.
So, with effect from September 1999, 'the financial support available from the Government will be assessed against family income and the funds to which students are entitled after the assessment will be repayable after graduation.'(Supporting Students in Higher Education, DEE, September 1997)
For certain students however, some grants remain to contribute towards living costs. A student may be eligible because of his or her particular circumstances. Hardship loans and access funds, for example, can be applied for if a student gets into, or is likely to get into, serious financial difficulty. Special help is also available to students starting National Health Service (NHS)-funded health professional programs.
As well as student grants being replaced by a system of student loans, students are also required to contribute to the cost of their tuition.
Fees
So, if you are thinking of going to university, you may be expected to make a contribution to the cost of tuition of up to £1000 (pa). The contribution is means-tested so that a family with a total income of less than £23 000 (pa) will not be expected to contribute, but a family earning £35 000 will be expected to contribute the full amount. The Government estimates that 33 per cent of applicants will be required to pay £1000, 33 per cent will pay something between £100 and £1000, and 33 per cent of applicants will be required to pay no fee at all. The Government strongly advises all students to apply to their Local Education Authority (LEA) or the Education and Libraries Board for those who live in Northern Ireland, for support towards fees. Even if you think you will have to pay the full contribution it is still worth applying. If you don't apply, you may have to pay the full fees charged by your college and may not be able to receive student loans and grants towards living costs.
Loans
The new means-test will also enable you to borrow according to your assessed needs. Student loan repayments take account of inflation but do not have the same interest rate which banks and other lenders charge. The 1999/2000 academic year is the first in which you can apply for a loan before your course starts. You should apply to your Local Education Authority for a loan at the same time that you apply for support towards tuition fees. The Local Education Authority will then confirm the amount of loan you are entitled to and will ask how much of it you require. You must then tell the Student Loans Company (SLC) of this amount and they will pay it. You will not have to pay back your loans until after you graduate. Repayments will be deducted from salary along with income tax and they will be linked to the level of your income. A graduate earning £17 000 (pa) for example, would have £52 per month deducted from salary, whereas no repayments will be required from those earning less than £10,000 (pa).
Grants will still be available for certain students. This extra grant is available for students with dependants, single parent students and disabled students (Disabled Students' Allowances).
Grants for students with dependants and single parent students will be means-tested, but Disabled Students' Allowances (DSAs) will not be.
Hardship loans and access funds
These are available mainly to help students having difficulty meeting their living costs. Access funds are also available to students who may otherwise be put off going into higher education because of the cost. The first port of call is the student support office, the student services office or the students' union at the university or college. From here students should be able to gain information on how and when to apply for a hardship loan or help from access funds. These funds are only available to students who have already taken out the full amount of student loan for which they are eligible.
Career Development Loans
Students who cannot get any funding from the sources above may be able to take out a Career Development Loan. For a free booklet, call free phone 0800 585 505. Career Development Loans are not available in Northern Ireland.
Other sources of help
Certain students, such as single parents and disabled students, may be able to get Social Security Benefits. If you receive benefits and want to take a course of education, you should ask your local Benefits Agency office how this may affect your benefit.
Local authorities can also award Housing Benefit and Council Tax Benefit to certain students, including single parents, student couples with dependent children, disabled students and part-time students. Partners of students may also claim. For more information, you should contact your local authority. In Northern Ireland, you should contact your local Housing Executive office for information about Housing Benefit.
Some educational trust funds and charities give small grants for specific reasons. They may help with fees, books or equipment. You can find lists of these trusts and charities in most public reference libraries.
Some universities and colleges also have their own small hardship funds, which they manage separately from their access funds and hardship loans. If you are seriously worried about money, ask the university or college which you are thinking of going to if it has such a fund.
