The Tuition Fee Loan - A Lesson for English College Students

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1 Department of Criminology Payment of course fees for part-time students with effect from 1st September 2012 Part-time students can now take out a non-means tested tuition fee loan to cover the costs of tuition fees, which means you won t have to pay your fees upfront and you ll only begin to repay the tuition fee loan if you are earning more than 21,000 a year. Tuition Fee Loan Key Facts All part-time UK students studying in Higher Education for the first time may apply for a non-means tested tuition fee loan to cover the costs of tuition fees. Repayments of the tuition fee loan will be 9% of income over 21,000. You will not see this money. It goes directly from the Student Loans Company to the University. The tuition fee loan is not available for Postgraduate students. For eligible part-time students, your tuition fee loan will cover the full cost of your tuition. The amount of money you can borrow will therefore depend on the cost of your course. After 30 years any remaining debt is written off. www2.le.ac.uk/departments/criminology

2 2 UNIVERISTY OF LEICESTER- DEPARTMENT OF CRIMINOLOGY- PAYMENT OF COURSE FEES FOR PART-TIME STUDENTS FAQs Section 1 Eligibility How do I know if I am eligible for a tuition fee loan? To be eligible for a tuition fee loan, you must meet the following criteria: 1. Be ordinarily resident in England on the first day of the first academic year of your course and have either been living in the UK, the Channel Islands or the Isle of Man for the three years immediately before this date; and have settled status which means that you are living permanently in the UK without the Home Office placing any restrictions on how long you can stay. You are ordinarily resident in England if it s where you normally live, even if you live abroad on a temporary basis or move from England with your family overseas, e.g. due to an armed forces posting. 2. Do not already hold a degree. 3. Do not hold an undergraduate qualification that is equivalent or higher than your new chosen programme of study. 4. The course you wish to study must be a minimum of25 per cent of the equivalent full-time course load per year (which equates to 30 credits per year.). Does my spouse or partner s income get taken into account? The tuition fee loan is not means tested, so the amount you earn or your household income does not affect your eligibility. Is there an upper age limit to apply for a tuition fee loan? No there is currently no upper age limit for applying for a tuition fee loan. If I take out a tuition fee loan will this affect my benefits? No. Government-backed tuition fee loans for study fees in England do not count as income and therefore will not affect your benefits entitlement. Section 2 Repayments When do I have to start paying back the tuition fee loan? Part-time students who start their course after 1 September 2012 begin paying back their tuition fee loan once they earn more than 21,000 a year. If their income falls below 21,000 a year, repayments stop. New part-time students begin to repay the tuition fee loan in the April which falls three years after the anniversary of the start date of your course, even if you are still studying. E.g If you start studies in October 2012 then you begin to repay in the April which falls three years after October This would be April 2016, but only if you are earning over 21,000 a year.

3 3 UNIVERISTY OF LEICESTER- DEPARTMENT OF CRIMINOLOGY- PAYMENT OF COURSE FEES FOR PART-TIME STUDENTS How do I work out what the monthly repayments will be? You repay 9% of your income above 21,000. So for example, if you earn 25,000, the 9% would only apply to 4,000, ( 25,000 21,000 = 4,000) meaning you would repay around 30 per month. How do I make repayments? Your repayments will automatically be taken out of your salary every month you will not need to contact your bank to set up direct debit payments. Remember, if you are not earning over 21,000 a year you don t make any repayments. If you are self-employed, separate arrangements are in place with HMRC to make your repayments. What happens if I decide I no longer need the tuition fee loan after I start my studies? Can I pay it back immediately? Students can pay back all or some of their loan at any time without incurring an early repayment charge. Will I have to repay my tuition fee loan sooner if I withdraw from my course before finishing my studies? If you withdraw from your course before completion, you may have to repay your loan sooner. The University will recalculate the fee due for your period of study and inform the Student Loans Company. The amount you will have to repay and when will depend on your point of withdrawal and your earnings at the time. How long will it take me to repay my tuition fee loan? It depends on the size of your loan and how much you earn after you have finished your course. Interest is applied to your loan and so the interest rates will affect the size of your loan. After 30 years, any unpaid balance will be written off. You will get statements each year from the Student Loans Company informing you of the outstanding balance. What happens if I lose my job or take a career break? If your salary falls below 21,000 a year your repayments stop. So, if you take a career break or a pay cut or are unemployed, your repayments will be suspended until you are earning over 21,000 again. What rate of interest will I be charged on my tuition fee loan? Interest on your tuition fee loan will be applied at inflation rate (RPI Retail Price Index) plus 3% while you are studying, and up until the April after you finish your course. From the April after you finish your course, if you are earning 21,000 or less, interest will be applied at the rate of inflation. For those earning between 21,000 a year and 41,000 a year, interest will be applied between RPI and RPI plus 3% on a gradual scale depending on income. For those earning 41,000 or more, interest will be applied at RPI plus 3%.

4 4 UNIVERISTY OF LEICESTER- DEPARTMENT OF CRIMINOLOGY- PAYMENT OF COURSE FEES FOR PART-TIME STUDENTS Do I have any control over how much I pay back every month? You don t have control over how much you repay each month, as when you are employed and earning over 21,000 a year it will come directly out of your salary. If you are self-employed, separate arrangements are in place with HMRC to make your repayments. Salary Amount from which 9% repayment will be deducted Monthly repayment amount 21, per month 22,000 1,000 8 per month 23,000 2, per month 24,000 3, per month 25,000 4, per month 26,000 5, per month 27,000 6, per month 28,000 7, per month 29,000 8, per month 30,000 9, per month The table above shows some salaries and typical repayments. Section 3 Applying for the Tuition Fee Loan How do I go about applying for a tuition fee loan? It is expected that students in England will be able to apply online for a tuition fee loan from early summer 2012, with confirmation received four to six weeks after submitting the online application. We will make an announcement on our website as soon as the on line application portal opens. When do I apply for a tuition fee loan before or after I have been accepted on the course? This can be done in either order, but you are advised not to delay submitting your course application. If I take out a tuition fee loan will I be credit checked? Tuition fee loans are not subject to a credit check.

5 5 UNIVERISTY OF LEICESTER- DEPARTMENT OF CRIMINOLOGY- PAYMENT OF COURSE FEES FOR PART-TIME STUDENTS Section 4 Other Types of Support Is there support available to help with my living costs while I study part-time? Part-time students are not eligible to apply for maintenance grants to help with living costs. I have a disability can I get any extra financial support? Disabled students allowances (DSAs) are available to help you if you are doing a higher education course and will incur extra costs because of a disability (including a long-term health condition, mental health condition or specific learning difficulty such as dyslexia). DSAs are paid in addition to the standard student finance package and are available if you are studying on a part-time course. They are not dependent on income and do not have to be repaid. For more information on this kind of support please contact the welfare office: welfare@le.ac.uk General Questions Will tuition loan repayments affect my ability to get a mortgage? The Council of Mortgage Lenders has advised that a tuition fee loan is very unlikely to impact materially on an individual s ability to get a mortgage. The amount of mortgage available may depend on net income. Will tuition fee loan repayments affect my ability to take out a loan of a different kind? This will be a decision for the loan provider, but tuition fee loan information won t be shared with credit reference agencies by the Student Loan Company. Do I have to get a full tuition fee loan? Could I pay some through a tuition fee loan and some by other means? You are not obliged to take out the tuition fee loan and can choose to pay your fees upfront if you wish. If you re eligible for tuition fee loan, you don t have to draw on the full amount that you are entitled to and can instead opt to pay some of your fees upfront and the rest via a tuition fee loan. If you have any further questions please get in touch with the Student Welfare Service T: +44(0) E: welfare@le.ac.uk Whilst every effort has been made to ensure the accuracy of this information, the content maybe subject to change and will be updated as appropriate. University of Leicester Leicester LE1 7RH UK