As we come into the autumn semester, when more than 350, 000 students across the UK will start university for the first time, we thought it was important we take a look at university funding: how much degrees cost, how universities are funded, who pays, and if that ‘who’ is the student themselves, where they can access the necessary money.
What price education?
The cost of providing an individual with an education that results in a degree certification is variable, to say the least. Most universities have physical buildings, as well as online learning environments such as Moodle; libraries and IT facilities suitable for the use of thousands of people; support staff such as cleaners; professional staff such as business development executives; and of course lecturers, who spend time not only on lecturing but on course design, assessment marking and pastoral care. Depending on subjects offered, universities also may need to provide hugely expensive physical equipment for the courses themselves. They are expensive organisations to run, and most are operated as charities thanks to the enormous benefits their research and training offer to their communities and to the UK as a whole. Charitable gifts, though, will never be able to cover all of their expenses, which is why we have to pay for university-level education.
In 2012, deregulated student fees were introduced, making the UK (specifically England) one of the world’s most expensive countries for attending university. At this point, the maximum cap for an undergraduate degree for a UK-domiciled student was put at £9,000 per year (now £9,250), an almost 200% rise from the previous rate. This makes the average student debt at over £50,000 by graduation according to the Institute for Fiscal Studies, with an inevitably higher debt for those from less well-off backgrounds who also have to take out loans for smaller costs along the way.
In Scotland, these higher rates are applicable for people from the rest of the UK, with free education available for Scottish and EU students. However, these free places are also effectively capped due to a need for income from fee-paying students, leading to an odd middle-space where occasionally Scottish students are not offered a free place, and are also not offered a way to pay the full amount.
In Wales, the fee structure is the same as in England, except that the maximum tuition fees for universities within Wales has stayed at £9,000 instead of increasing to £9,250.
In Northern Ireland, the maximum tuition fees are £4,160 and all students are charged this amount. For Northern Ireland students who elect to go to an eligible university or college in the Republic of Ireland – where higher education is not charged for – there is a “Student Contribution Fee” payable to cover administration of examinations amongst other things. This is capped at €3,000.
How can I pay?
Given that a typical 18-year-old university applicant isn’t likely to have a spare £50,000 lying around, the traditional way to pay is by using the student loan system. There are student loan organisations in place for all four UK nations, generally offering the full amount a university would charge for both undergraduate and postgraduate degrees (with a few exceptions). These cover both tuition fees and, separately, maintenance loans to cover living expenses such as rent and textbooks. In addition, maintenance grants are available which are means-tested (which means your income, or more likely your ‘household income’ which tends to be that of your parents, is taken into account and varying levels of support are available). They are calculated on a yearly basis, and tuition fees go directly to the university whereas maintenance funding is usually paid into your bank account monthly. The links for more information on these are at the end of this article.
Student loans from these dedicated organisations are now charged at a rate of 6.1% interest. In combination with the other repayment factors – payments are not taken until the graduate has a salary of £25,000 (or £21,000 if you started your course before 2012), repayments are 9% of earnings above that threshold, and all debt is written off after 30 years – this means that around three quarters of students will never fully repay their loans. In effect, these loan repayments are more like an additional tax for those who can afford it. Loan repayments are also written off if the graduate dies, or is declared permanently unable to work.
An alternative is a Career Development Loan – a scheme which is ending in January 2019, but if you’re struggling for the upcoming academic year you can get in quick to access the last of the funds. It’s a low-interest loan offered by several banks of up to £10,000 specifically for any education or training to further your potential career (including, for example, postgraduate study), and the interest is paid for you by the government while you study.
Many universities offer their own non-repayable bursaries or scholarships on top of these loan options. These can be offered based on academic excellence, on a student’s background or location, or on the particular course or school of study, and are funded by either interested organisations or, for example, bequests from university alumni. For details on these, see your university’s own website.
Part-time students can also be eligible for the above options, depending on the ‘intensity’ of the course structure. Unfortunately, part-time courses are charged as a percentage of their normal full-time fees whether any funding loans are available to students or not, leading to a fall in people undertaking part time study since the deregulation of fees. Maintenance loans are also not available for those students who are distance learning, unless they are physically unable to attend a campus due to disability. These policies go some way to shutting out a more diverse student population.
Where can I find out more, and apply for a student loan?
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Katherine is a qualified careers advisor and a member of the Career Development Institute. She has just begun a PhD programme to research meta-skill development in the workplace, and is a fiction editor and publisher in her spare time. You can find her on Twitter at @katobell.