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Maintenance grants replaced with loans

Aug 01, 2016

Maintenance grants replaced with loans From today, students starting university will receive larger maintenance loans instead of grants.

What are maintenance loans?

Maintenance loans are loans intended to help cover university living costs. They have to be paid back. Most undergraduate students in the UK receive a maintenance loan. Maintenance loans are different to tuition fee loans, which cover the cost of your course. The term ‘student loans’ includes both maintenance loans and tuition fee loans.

What were maintenance grants?

Maintenance grants were sums of money intended to help cover university living costs. They did not have to be paid back, and so were only given to students from lower-income backgrounds.

Who does this change affect?

This change affects any full-time UK student starting university in the UK from 2016 onwards. It does not affect students receiving maintenance grants who have already started university. These students will continue to receive their maintenance grants until they graduate.

How big could my maintenance loan be?

These figures are taken from the government’s Student Finance guide:

Full-time student                                Loan available for 2016-2017 academic year

Living at home                                                                         Up to £6,904

Living away from home, outside London                           Up to £8,200

Living away from home, in London                                     Up to £10,702

You spend a year of a UK course studying abroad          Up to £9,391

You can also use a Student Finance calculator to get a better sense of how much money you could borrow.

Can I still afford to go to university?

Yes. If you would have been eligible for a maintenance grant under old regulations, you’ll receive a larger maintenance loan now. You’ll actually receive more money whilst studying from a maintenance loan now than you would have with a maintenance grant under old regulations. The difference is that you’ll eventually have to pay this money back.

How will I repay the loan?

Maintenance loans are repaid in the same way as tuition fee loans. It’s true that an additional loan means more money to pay off once you graduate. However, your monthly repayments will not be bigger than they would be if you were paying back tuition fees alone. This is because the amount you repay to Student Finance will be based on how much you earn, rather than how much you owe.

As with tuition fee repayments, repayments for maintenance loans do not start until you’re earning at least £21,000 a year. This is one way in which student loan repayments differ from the repayment of commercial debt. Some argue that student loans should be renamed for this reason. Find out more about paying back your student loan.

Is university still worth the money?

Some graduates see a degree as a financial investment. They get a return on this investment if they go on to earn more post-university than they might have done without a degree. How likely this is depends on your course and the career you want to go into, so it’s important to research your options carefully before making a decision. It’s worth noting that even if you end up earning less than you expect to post-university, you’ll never repay any of your student loan until you are earning more than £21,000 a year.

What other financial support is available?

In addition to student loans, there are numerous other sources of financial support available to students. Some universities are even offering new grants to replace the maintenance grant. St John’s College, Cambridge, are now offering a grant to students from households with a combined income of £25,000 or less.