Degree Finance Myth Buster

Quality Higher Education at a Fair Price

Student getting some advice

What’s the truth behind all the headlines - will you be in debt forever?

Will you be able to get a mortgage while you are paying off your student loan? Is uni just for rich people now? Here we set out to bust some popular misconceptions about student finance.

“Now that fees have gone up I don’t think I’ll be able to afford to go to university.”

Remember that tuition fees do not have to be paid up front. You only start to repay your tuition loan when you are earning more than £21,000. You can also get a loan and you may be entitled to a grant (which you don’t pay back) to help pay for food, accommodation and transport.

“University is only for rich, posh people now – it’s out of reach for people from poorer homes.”

Actually many students from poorer households will be better off under the new system than they are now, with the extra support available through grants and loans. A National Scholarship Programme has been set up to benefit the least advantaged students going into higher education.

“I’m worried that I’m going to be saddled with a lifetime of debt.”

A graduate earning £25,000 per year will repay their loan at a rate of £30 per month, less than the cost of a cup of coffee a day. If your earnings fall, then the repayments will fall as well. No one will have to pay back anything until they are earning more than £21,000 a year. And remember, if you haven’t repaid the loan after 30 years, it will be written off.

“I’m already in debt from my first year at uni. With higher fees I won’t be able to afford to finish my degree.”

The increase in the cost of tuition does not apply to existing students. It only applies to students starting higher education for the first time in September 2012 or later.

“What’s the point in getting into so much debt when there are no graduate jobs for us to apply for when we’ve finished uni?”

The current jobs market is a tough one. But it makes it even more important to get a good education and make yourself as employable as possible. Research shows that having a degree improves a person’s chance of getting a job and they will earn more than non-graduates in years to come. Graduates are also more likely to be in a job than those with lower qualifications. On average graduates earn £12,000 per year more than non-graduates over their working lifetimes.

“I’ll never be able to get a mortgage and get my foot on the property ladder with all that debt.”

Not true. The Council of Mortgage Lenders says a student loan is very unlikely to impact on an individual’s ability to get a mortgage. For more information about the financial support available and the benefits of going to university, visit Gov.uk's Student Finance page.

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