Student Loan Changes for 2020

Students look for reliable institutes for their higher studies. After all, quality academic education guarantees tremendous success in the long haul. As students, financial aid for admission is a challenging part. Several students work as part-time employees to manage their finances. To lend a assist hand to such students, several credible institutes in the UK offer student loans.

If you consider the UK, the tuition fees of colleges around the region begin from £9,000 going up to £16,000 per year. This amount cannot be paid by any unemployed graduate in the UK to pay off the tuition fee. This is where student loans come for rescue. We have included all the details about the types of student loans and dates for payments. Let’s understand each one of them below.

Maintenance Loan for Students

The maintenance loan is for those students who cannot bear their everyday living cost. By telling them about your income and providing authentic reasons, you can become eligible for this loan.

• Depending upon the joining date of your semester, your student loan is paid in three instalments.
• If your semester begins in September, you are most likely to receive your first payment on the first official day of your class. The other two payments will be followed in January and in April.
• You are eligible for this loan only if you have registered in the courses and have a proper attendance marked with the institute.
• It is mandatory to be enrolled in a course as the university will channel your request to the Student Loans Finance (SLC) to release your payment.
• Once you are enrolled, make sure to have extra cash to cover your initial costs such as books, conveyance etc.
• SLC may take 3-4 days to transfer the payment into your account. You can also check your request process once your application is approved.
• If it is more than a week you haven’t receive your payment, you must contact the institute’s financial department. The delay may either be because of non-approval of application SLC’s confirmation.

Tuition Fee Loans for Students

• Postgraduate Loans
• For post-graduate students, the loan is directly paid to the institute on behalf of the student.
• Once the instalment is paid, you will have to repay after completion of your degree.
• The interest rate of post-graduates 5.4% including (RPI + 3%) if they are earning £46,305 each year.
• The repayment threshold is £21,000.
• Undergraduate Loans
• If you are a full-time student, you will have to pay a percentage of the loan amount at the start of the new academic semester.
• If you are a part-time student, you will be liable for a percentage of student loan after being registered for two weeks in a course.
• You will remain liable to pay this amount even after you have transferred your courses or withdrawn your admission.

How to Apply For Student Loan?

• You are eligible to apply for the student loan after the completion of the first nine months at the institute.
• The official government website of the UK provides the platform to apply for financial aid assistance.
• Simply create a finance account online with proof of identity, household income and loan declaration to begin your process.
• You can apply for maintenance loans or tuition fees loans according to your needs.
• Maintenance grants are only allowed to students who have registered their first course before August 1, 2016.
• If you are having trouble in applying online, you can download the forms and post them by mail to the government of the UK.
• Also, you have to apply for student loan every academic year. Once the cycle of three payments is completed, apply again for continuing the funds at the UK government website.

What is the Repayment Process?

This is where the struggle starts. The repayment of loans starts as soon as you have finished your courses. Although how much amount you are going to pay depends on the payment plan you choose.

Plan One

• This includes loans which were taken before September 1, 2012 in England or Wales.
• If your income is more than £18,935 per year, you will have to pay 1.75% of your income from April to the government.
• From April 6, 2020, the threshold amount is going to increase from £18,935 to £19,390
• The repayment amount is renewed every year on April 6.
• The process is paused only if your salary is lesser than the aforementioned amount.

Plan Two

• This includes loans which were taken on or after September 1, 2012 in England or Wales.
• If your income is more than £25,725 per year, you will start paying the government the very next April you have finished your courses.
• Or if you are studying part-time, the repayment period begins four years after the start of the course.
• Also, after April 6, 2020 to April 5, 2021, the repayment amount threshold will rise to £26,575.

Every student has to pay 9% of their salaries along with interest to the government for providing financial assistance. Making it £17,775 for Plan One and £21,000 for Plan Two.

You can either voluntarily repay your student loan or get it deducted from your monthly salary with tax. However, research shows many times graduates overpay without even realising. So, it is advised to follow up every deduction from your bank account thoroughly.

How to Reclaim Your Loan Overpayment?

If you are one of them who has overpaid their loan amount without knowing, contact SLC immediately. They will check your records, and if found true, they would transfer the excess amount into your account. You can also request them to notify about the outstanding amount and paid amount. This will help you keep track of your money and plan your monthly expenses accordingly.

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