Student Finance and Budgeting Friday 26 th April 2013

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1 Student Finance and Budgeting Friday 26 th April 2013 Elliot Newstead Student Recruitment Officer School and College Services University of Leicester

2 Student Finance and Budgeting Financial support available for UK and eligible EU students from 2013/14 onwards Advising students on building a budget and managing their money The impact on students families

3 Financial Support Student Finance Universities Tuition Fee Loan Maintenance Grant Maintenance Loan Additional Support Bursaries and Scholarships

4 Financial Support - Tuition Fees Tuition fee loan Will cover the full cost of tuition Paid from Student Finance England directly to the University/HEI Nothing to be paid up front

5 Financial Support - Living costs Additional support for living costs through a maintenance loan and grant Means tested based on household income Paid by Student Finance England to the student 3 instalments throughout the academic year Larger loans for studying in London Smaller loans for living at home whilst studying

6 Maintenance Loans/Grants Household Income Grant Loan TOTAL 25,000 or less 3,354 3,823 7,177 30,000 2,416 4,292 6,708 35,000 1,478 4,761 6,239 40, ,230 5,770 45, ,288 5,288 50, ,788 4,788 55, ,288 4,288 60, ,788 3,788 Over 62, ,575 3,575

7 Additional support Disabled Students Allowances Additional grant Help for students with children Childcare grant Parents Learning Allowance Adult Dependants Grant Access to Learning Fund Genuine financial hardship

8 Financial Support - University Bursaries & Scholarships Money for eligible students direct from Universities Non repayable Individual schemes for each University Critical for students to research this Important to be proactive not reactive

9 Scholarships at Leicester 2012/13, 13/14 Students are eligible for one of the below not both Chancellor s Scholarship 2,000 annual fee waiver AAA at A-level (or equivalent) Access Courses included Departmental Scholarship 1,250 annual fee waiver Academic criteria either AAB or ABB (or equivalents) depending upon department

10 Scholarships at Leicester cont. Leicester National Scholarship Programme (NSP): 2,000 annual fee waiver 1,000 annual cash award For students who demonstrate academic ability and potential and whose household income is below 25,000. All subject to change for 13/14 entrants Students can get NSP + either Chancellor s or Departmental scholarship Latest scholarship information:

11 Scholarships at Leicester 2014/15 Chancellor s Scholarship 1,000 annual fee waiver each year AAB at A-level (or equivalent) Available for Access Course students

12 Scholarships at Leicester cont. 2014/15 arrangements Leicester National Scholarship Programme: 2,000 annual fee waiver 1 st year only 1,000 annual cash award each year For all students whose household income is below 25,000 No application needed will be automatically awarded Students can get NSP + Chancellor s scholarship

13 Loan Repayments No repayments until you are earning above 21,000 Repayment = 9% of income above 21,000 All outstanding repayments will be written off after 30 years Not a commercial loan, no impact on credit rating New graduates will pay less per month than they would have done under the previous system

14 Loan Repayments - Examples Salary Amount above 21,000 Monthly repayment 21, ,000 1, ,000 4, ,000 9, ,000 19,

15 Repayment - Interest Rates Interest rates: Graduate Earnings Below 21,000 pa Between 21,000 - approx 41,000 Proposed Rate of Interest No real rate of interest applied to loan Real rate of interest will start to be charged, reaching a maximum of RPI plus 3% Above 41,000 Repay at the full rate of RPI plus 3%

16 How to apply Apply through Student Finance England online Means testing based on previous tax year (i.e. April 2011 April 2012) Can apply for Current Income Assessment if income changes (more than 15%) Link to UCAS application Must be submitted by end of May

18 What does it mean for the students? First time receiving a sizeable income Being responsible for their own money Moving away from home and learning about life s lovely hidden costs (rent, food, bills, insurance ) Learning to budget

19 Advising Students - Budgeting Not something that can be taught, learn as you go along Make student aware of some of the costs associated with studying at university Give them a few tips on how to put together a budget

20 Advising Students - Budgeting Variable Fixed

21 Budgeting

22 Advising Students Supplementing their income Part time job Full time job during the summer Parents/family/savings Student bank account - overdraft Credit card?

24 Impact on Families - Concerns over Fees Struggling to see past the cost Parents/carers unaware that there is nothing to pay up front Parents/carers worried about the financial implications of a large student debt Parents/carers and possibly students losing sight of why they are going to University in the first place!

25 Impact on Families - Key Messages No up front costs tuition fee loan covers full fees Costs are repaid by graduates, not students or their families Repayments only begin once a graduate is earning above 21,000 Affordable repayments Not a commercial loan (credit rating, bad debt )

26 Impact on Families - Paying up Front? Of course, fees can be paid for up front Over 3-4 years of study, this could amount to a lump sum up to 36,000 Could this be better spent on something else? Similar situation with regards to early repayment of student loans

27 Impact on Families - Bank of Mum & Dad Structure of maintenance loans and grants places an expectation on wealthier families to contribute more towards living costs Parents/carers don t want to be bankrolling 3 years of full living expenses even if they can afford to! Parents/carers should feel comfortable for students to take out the loans and partially/completely pay their own way - encourage financial responsibility

28 Impact on Families - The Big Picture Going to university for the right reasons Should not be put off by higher fees An investment in your future Making the most of their time at University Not just about getting a degree Employability skills, job prospects

29 Summary No up front fees Loan repayments are affordable Not a commercial loan and subsequent debt Parents/carers (not just the students) need a complete picture of the student finance system Remembering why students are going to University

30 Thank you Any Questions?

31 Useful Websites University of Leicester funding & welfare pages: NHS Bursaries: Student Finance England: Uni Aid (budgeting): Uni profiles + cost of living info: Martin Lewis: Careers advice and statistics:

Student Finance: A Parent s Guide. By Kimberley Lloyd Schools and Colleges Liaison Officer

Student Finance: A Parent s Guide By Kimberley Lloyd Schools and Colleges Liaison Officer Student Finance: A Parent s Guide Overview of a Student s Finances The Student Finance Package How to Apply What