Student finances: your questions answered

David Malcolm of the NUS

Tens of thousands of university students, many in their first year, are still waiting for their loans and grants to be paid by the Student Loans Company (SLC).

Last week we asked you to send in your questions about this and any other aspect of student finance.

They have been answered by David Malcolm of the National Union of Students (NUS).

Q. I applied for student finance in April, and all evidence was provided at the point of application. I am currently waiting for something which I am supposed to sign and return before I get any finance. I have been registered on my course since September 15th and have not yet received any finance from Student Finance England. I have tried complaining to them, the BBC, and my local MP, and do not appear to be getting anywhere. Is there anyone I can complain to who would be able to help? Kirsty Offer, Lancaster.

This is a common problem this year. As you may have seen from media reports, many tens of thousands of English students have experienced delays in the processing of their student finance applications this year as a result of problems at Student Finance England.

Unfortunately, there are no easy ways to get around your problem. If you are experiencing financial difficulties then speak to your university about temporary funding from the hardship funds there, or to an adviser in the university or students' union about other options. Otherwise, it will be a matter of persevering with Student Finance England until they can complete your application.

Q. My son will go to university next year as a mature student aged 27. With no source of income, what loans or grants will he be able to apply for? Mel Saunders, Bristol.

Assuming here that your son is living in England and intending to study there, and is not married or in a civil partnership, he would be assessed on his own income. Generally speaking, unless he has significant income from savings interest or investments, this will likely mean he receives the maximum support on offer.

Mature students do not receive any additional finance, but he would be entitled to a fee loan to the value of the fee charged, then a maintenance grant of £2,906, and a student loan of just under £3,500, if he is studying at an institution outside of Greater London. There is also a student finance calculator here.

If he has dependant children or a disability, he may be entitled to additional support and his university or college might offer a bursary - check with them for details.

Q. After graduating in 2005 I have been in employment for just over four years and have only recently gained a job with a decent salary. For years, the Student Loans Company charged me more in interest than I was actually repaying in capital. I was "sold" the loan on an interest free basis, paying only inflation, but a couple of years ago when inflation was 2.2%, I was charged 4.5%. Is this right and can us ex-students do anything to claim this (in my opinion) rip-off interest? Wayne Golden, Leeds.

Unfortunately it is correct, and the law in this respect has been followed. Student loans were never interest-free, but the interest is the rate of inflation, as measured by the Retail Prices Index in March every year, applied from the following September. In 2007/08 this was higher than it had been for a number of years at 4.8%, due to a spike in inflation caused by increases in the price of oil and gas.

Since then it has declined sharply, and for the 2009/10 academic year it will be zero, so for this year at least you will not have any interest to pay.

Q. What are the set amounts for students to pay when they are on work experience for a year? Why do we have to pay fees? Do we even have to pay fees? I am currently at Brighton and I have to pay just over £700. Is this normal?

A student arriving for Manchester University's freshers week

Alex, Bristol.

Students on "sandwich courses" which include a year in industry can be charged up to 50% of the fee for full-time students under the regulations - up to £1,610 in 2009/10. Brighton, therefore, charges lower than the maximum permissible rate.

Charging a fee is quite common, and universities would argue that it pays for administration costs as well as allowing you to stay registered and access facilities such as the library or the sports centre.

Q. I graduated five years ago and, according to my P60s, I have paid off my loan. However, the SLC has not taken off one year's worth of payments, to the tune of £2,500. As a result I am still paying interest and am still seeing deductions from pay. I have tried to contact them but with no success. What would you advise? Mark Firth, London.

Ultimately it will be the Student Loans Company who sort this out, and you will need to get copies of your P60s to them so you can demonstrate your loan has been paid off. Make sure you have a copy of any correspondence you send.

As you may have seen from reports on the BBC and elsewhere, there are significant problems with student finance processing at the moment, and it may be that this is the reason you cannot get through to the SLC. If this continues, you might want to try the complaints process - this is outlined at www.slc.co.uk

Q. My girlfriend has just started university and is hating it - her course is a nightmare. I was just wondering if she quits now will she have to pay back the grants she received as well as the loans? And do they need to be paid back immediately? Graham Dempsey, Northern Ireland.

First of all I would suggest your girlfriend speaks to an adviser in the university or students' union, so they can run through all of her options - for example, the possibility of transferring to another course.

However, if she does wish to leave university, and assuming your girlfriend is funded by the Northern Irish authorities, she should contact the Education and Library Board to inform them of her decision. They have the discretion to decide whether, and if so how, any grant monies are repaid; so it will be a matter of discussing her situation with them.

She should also contact her university as many will reduce the fee liability depending on the date the student leaves the course, so the sooner she does this the more likely it is she will save on the fee. But note that they do not have to reduce it at all - again I would suggest speaking to an adviser for help in this event.

Q. I am English, my wife is Irish, my children have dual nationality and we live in England. Can the eldest get free tuition fees if she studies in Scotland?

Advice can be found in various quarters

Andy Barnard, Maidenhead.

The key point will be where your daughter is resident at the time of application for student support. If she is resident with you in England then she has to apply to Student Finance England regardless of where she intends to study, or her nationality or that of you or your wife. This would be equally true if, for example, you were Scottish but living in England.

If you were to move your place of ordinary residence to Scotland or Ireland before your daughter started her course, then she could be assessed under different rules. However the Student Awards Agency for Scotland (SAAS) would have to be satisfied that your daughter had not moved purely for the purposes of higher education.

Q. I have just finished a post-graduate course and found myself in debt. I did not take out a student account or loan when I was studying as I thought I was fine, but I now find myself in about £3,000 debt and with no interest free overdraft or 0% credit card. Is there a graduate account you can open with benefits if you did not open a student account while studying? Jenny Tollady, London.

Possibly; some banks do allow you to open new graduate accounts for a certain period after you graduate from an undergraduate degree (typically three years). You should check out some of the major high street banks for their terms and conditions.

Q. Are student loans taken into account when applying for a mortgage? Can someone who is bankrupt or has an IVA still apply for tuition fee and maintenance loans?

Finance can be a nightmare for some students

Anon.

Student loans would not, other than in a small number of exceptional cases, show up on your credit record as the Student Loans Company does not generally share data with credit reference agencies. A mortgage lender will likely want to look at your monthly outgoings to see if any repayments would be affordable, but student loan repayments in and of themselves should not affect your ability to get a mortgage.

Eligibility for student loans does not depend on a good credit rating, so bankruptcy or an IVA would not prevent you from taking out a loan. There is a clause in the regulations which would allow Student Finance England to refuse to provide support to someone they regard as "unfit" to receive it, but generally this is only used where the applicant has been guilty of fraud or something similar.

Q. Four readers asked us about the availability of funding for post-graduate studies. Anna Warren, Doncaster; Jennifer O'Neill, Bristol; J McKevitt, Newry; Brian Wadkins, Crewe.

It can be very difficult to secure funding for postgraduate courses. Only two subjects - teacher training and social work - have any guaranteed funding, other than a small number of taught postgraduate courses in Scotland funded by the Students Awards Agency for Scotland.

Otherwise, the bulk of state support for postgraduates is administered through the research councils. You can contact www.rcuk.ac.uk for details of the different research councils and their studentship schemes, although the closing date for applications is usually May for an autumn start, so you must plan ahead.

The competition for research council funding is usually fierce, and for those who miss out on this, the alternatives are Professional and Career Development Loans (bank loans with some government subsidy), charitable funding (although it is very unlikely this would fund a whole course), employer sponsorship, part-time employment or family support. Most likely, it will be a combination of some or all of the above.

Postgraduates can also apply for help from hardship funds at universities, but the expectation will be that they will have secured reasonable funds for tuition and living costs so this will not provide core funding.

You can access information about Professional and Career Development Loans at www.direct.gov.uk/pcdl

Q. I am quite confused about how the "top up" fees system works. If you started on £3,225 this academic year, for example, would you continue to pay this amount for the next two years, or would the annual tuition fee increase so you would have to pay an increased amount in subsequent years?Jagpal Singh, Bristol.

Under the system, the cap on the amount of tuition fees a university can charge increases by inflation each year. So, a student starting in 2009/10 and paying £3,225 will see this increase to £3,290 in 2010/11, and a further increase of about 2 per cent is likely for 2011/12.

Q. There has been a lot of talk about removing the cap on tuition fees. Is this likely to happen in the near future? AJ, Haywards Heath.

The cap on tuition fees in England can only be lifted with the approval of Parliament. The government is about to begin a review of the whole system, which will make recommendations for any changes. It now seems probable that the final report will not be published until after the next general election.

Obviously we do not yet know the outcome of the review, and it is the NUS's strong opinion that a rise is by no means inevitable - not least because of the cost to the Treasury of higher loans for fees. However, even if a future government were to decide that the cap should rise, it is unlikely that this would take effect before 2011/12 at the very earliest.

Q. Three readers asked us about funding for a second undergraduate degree. Alex Sjoberg-Weekes, Nottingham; Ross, London; Simon, Kent.

In England, if you already have an honours degree, the government no longer offers student support for a second qualification. It has also withdrawn the teaching grant given to universities for most courses, with the exception of a handful of "important" subjects such as medicine and veterinary science, or where the student qualifies for the disabled students' allowance.

The impact of this is that, in effect, those studying second degrees not in those important subjects, or who are not classed as a disabled student, are treated as international students. That is, the university or college can charge unlimited fees and, in the absence of the teaching grant, most will do so. Even for those subjects where the fees are at the level charged to home students, there is no loan available to pay these, nor grants or loans for living costs. Disabled students and those with children can still apply for the supplementary grants to help them.

The alternatives are few, and are the same as the alternatives to research council funding mentioned in my answer on postgraduate funding above.

Q. How exactly is household income calculated for the maintenance grant; for example does it include unearned income? Geoff Stocker, London.

This is a complex area but essentially the household income figure is made up of the expected gross unearned, taxable income of the student (such as savings interest or share dividends) in the academic year, added to the total gross, taxable income, earned and unearned, of any sponsor or sponsors of the student from the previous full tax year (so for 2009/10 starters, this is the 2007/08 tax year).

The sponsors would either be their parent or parents with whom they live, or the parent and a step-parent, or their spouse, civil partner or cohabiting partner, depending on the student's particular situation. Some of the sponsor's income will be disregarded, including some types of pension payment, and an amount for other dependant children, or where the sponsor is themselves a full-time student.

A student under 25, unless married or in a civil partnership, will be assessed on their parents' income, but there are exceptions to this rule, such as where the student has supported themselves for three years, or is permanently estranged from their parents.

A reassessment can also be made if the income of the sponsor has dropped by more than 15% between the tax year assessed and the current academic year. An adviser in the university or students' union can take you through the system in full if you have further questions.

The opinions expressed are those of the author and are not held by the BBC unless specifically stated. The material is for general information only and does not constitute investment, tax, legal or other form of advice. You should not rely on this information to make (or refrain from making) any decisions. Always obtain independent, professional advice for your own particular situation.

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