Grant for Education

This is a matter dear (pun designed) to many of you, or soon it is going to be.

Basing on the National Union of Students Press Pack for 2006/07, the funds for students to create interesting reading.

The Higher Education Act of 2004 permitted to universities to take tuition fees from September of the current year. It is generally known that the majority of them are charging only £3,000 pa maximum

This inflation will go to 2010, when the government is going to review the degree of the fees.

Majority of students will ask for a student loan to pay these fees. Both student loan for study and the separate loan for living expenses should be taken out during the year of study. These two loans are no way means tested, but different scholarship grants are obtainable as well as institutional treasury.

All living costs are generally covered by a student loan, with higher allowances for those in London, and the lowest for those still in the parental home. In addition, 25% of the maximum amount a student can receive will be subject to the household income assessment.

There are also supplementary grants available for additional costs of study or costs peculiar to them.

So what help can students expect in financial terms?

Living away from home in London - £6,170
Living away from home elsewhere - £4,405
Living at home - £3,415

Please note these exclude the final year when there is slightly less assistance. It is worth noting that students of medicine, dentistry and teaching get their tuition fees paid for them in the final year.

It is also important to note that students with parents with higher incomes can have only 75% of the maximum available loan.

The loans are then repaid depending on the borrower’s income from the following April after graduation. They are repaid at 9% of any income that exceeds the annual income threshold, currently £15,000 pa.

So what is the damage to your pocket I hear you ask

Taking into account the typical overall costs for course fees and living expenses, and presuming tuition fees are required at £3,000 pa, and the student is from a higher income family, then the impact on your pocket will be:

London - £6,986 pa
Elsewhere - £6,315 pa

Recent figures from Nat West show that the average debt for a student qualifying in 2006 was £13,252. However, for a student on the new system funding a standard 3 year course in London, student loan debt could total as much as £27,615. Other sources such as Barclays and the Skipton have estimated student debt to be £20,000 by 2010.

Length and type of course obviously have a big impact, with 20% of medical students owing more than £30,000 in their final year.

A fair question would be “is it worth it”?

Do graduates go on to earn more money on average?

Well, it seems that the value of having a degree is indeed considerable. The gap between the earning of graduates and non-graduates continues to grow ten to fifteen years after graduation.

In 2006 graduates aged 25-64 could expect to earn on average 58 per cent more than those with only secondary level qualifications .

But it will definitely cost you, especially if you have more than one child!

The Financial Tips Bottom Line

The key is to anticipate these costs and plan ahead to make paying for university costs as painless as possible. You will have a number of options to fund the gap, including funding from income and investing over the medium to long term.

As ever, make sure you research ALL your options.

If you’re already investing/taking action, review your affairs to make sure you’re on track to achieve the target amounts.