Can You Afford To Go To University?
Going to university is one of the biggest decisions you will make. For me, as a careers advisor, I highly recommend being sure about your career choice, as there are over 2000 potential career choices, but most people pick the general job roles (or university course) for bizarre reasons such as “their parents told them to pick that career” or “because my friend has picked that course”
Remember you spend over a third of your life in employment and you need to be happy about your career choice. Some courses cost up to £9000, you don’t want to be spending that type of money only to leave half way through the course, or to graduate only to decide that you want to do something different. Discussing and planning your career goals, can not only save you money in the long term but can also make you feel excited about your future.
Once you have decided on the university and course that you are interested in, you need to know some key facts about university finances, because many believe, due to the rise in tuition fees that they can’t afford to go to university.
- No-one has to pay fees upfront. You can apply for loans to pay for your university fees, and once you graduate you don’t have to pay the loan back until you ear over £21,000 a year. If you never earn this amount, you won’t have to pay your loan back.
- Some eligible students can also apply for maintenance loans to help pay for rent, food, bills, etc.
- After 30 years whatever is left to pay off your student loan is wiped out – you won’t owe any more money.
- If you have the money to pay for your course up front, you can do. This way once you leave university the money you earn is yours. Remember though depending on your salary depends on how much you pay back. For some people they may have only paid 50% of their loan back before the 30 years is up and they automatically have their debt wiped put.
- Also look for extra funding. In some instances students may be given a Bursary or Scholarship (from a business or charity)
- You back around 9% of your loan. So if in your first job you earn £22,000 you will pay back £90 a year. £25,000 is £360 a year, £30,000 is £810 a year and £35,000 is £1,260 a year.
- The money automatically comes out of your pay packet, under the heading ‘payroll deductions’ the same way tax is deducted from your pay. Which, as the employee, means you don’t need to worry about paying anything back, it’s all automatic.
- You will be charged interest on your loan (at the rate of inflation). Depending on what you earn depends on what you pay. If you earn £21,000 you will pay interest at the rate of inflation, when you earn over £41,000 you will pay interest at the rat of inflation plus 3%
- The interest rate is only paid at the end of your loan, so if you don’t pay your whole loan (IE after the 30 years is up) you won’t pay any interest.
- If you ever lose your job as an example due to redundancies, your repayments will stop
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