How Much Is The Average Student Loan Debt In The Uk
Students who graduated from universities in England in 2020 owed an average of £40,280 in student loan debt, compared with just under £25,000 for graduates of Welsh universities, £23,520 for graduates in Northern Ireland, and £13,890 for graduates of Scottish universities. Those figures are vastly higher than they were in the year 2000 when indebtedness for graduates in all three countries was under £3,000.
If You’re A Muslim Student
Muslim students in England are set to be able to get alternative student finance acceptable under sharia, although there is no news on when this will be made available. We’ll update the guide as soon as we know more.
Had lessons online as a result of coronavirus? We’ve had lots of people asking whether they can get a partial refund of their tuition fees if their courses are have been carried out online . Unfortunately, you shouldn’t hold out too much hope of getting a refund, but Martin has done a 10-minute explainer video which hopefully can help.
Leaving The Country To Evade Repayment
Debt evasion is the intentional act of trying to avoid attempts by creditors to collect or pursue one’s debt. Some news accounts report that individuals are fleeing the US in order to stop repaying their student loans. While leaving the country does not discharge the loan or stop interest and penalties from accruing, it is generally more difficult to collect debts against debtors who reside in foreign nations.
International addresses make it more difficult to find people, and collection companies would usually need to hire an international counsel or a third party collector to recoup the debt, cutting into their profits and reducing their incentive to go after a debtor. ‘It increases our expenses to go overseas,’ says Justin Berg of American Profit Recovery, a debt collection agency in Massachusetts. ‘Our revenues are cut by more than half,’ he says.”
Some nations may enter into agreements with the US to facilitate the collection of student loans.
After default, co-signers of student loans remain liable for repayment of the loan. Cosigners are often the parents of the borrowers.
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Federal Direct Student Loans
The table below shows the breakdown of the maximum amount you can borrow when taking out Direct Subsidized and Unsubsidized student loans. Note that the total for each year, and cumulatively, includes both subsidized and unsubsidized federal loans. If, for example, your subsidized loan total in year one as a dependent undergrad is $3,500, you are limited to $2,000 in unsubsidized loans for that year. If your subsidized total is less than $3,500, the difference between that and $5,500 can be unsubsidized loans.
The amount you can borrow each year and cumulatively as an undergrad is also affected by your parents’ eligibility to help you by taking out a Direct PLUS loan. If they are eligible, the amount you can borrow in your own name is less. If they are ineligible, due to poor credit, for example, you can borrow more. Amounts for independent undergrads also reflect lack of parent supportas do amounts for graduate and professional students, who are always considered to be independent.
| Dependent Undergrads | Subsidized |
|---|---|
| $138,500 |
The aggregate total for each class of borrower includes all unpaid loan balances for all federal student loans taken. This includes subsidized and unsubsidized FFEL loans, which are no longer available, as well as subsidized graduate level loans dispersed before July 1, 2012.
To apply for federal student loans, you’ll need to submit the Free Application for Federal Student Aid .
Maximum Limits For Direct Plus Loans
Direct PLUS Loans are another source of money for students who need additional funds to afford college. There are two types of PLUS loans: Parent PLUS Loans and Graduate PLUS Loans.
- Parent PLUS Loans are designed for parents of undergraduate students who want to help their children pay for college. Borrowers must be parents of dependent students, have healthy credit, and meet other general eligibility requirements.
- Graduate PLUS Loans are available to independent graduate students who have solid credit and are attending school at least half-time.
You can apply for both types of PLUS loans by filling out the FAFSA and then going to StudentAid.gov and applying for a loan directly on the website. Both loans also offer a wide variety of repayment plans so you can choose one that suits your needs.
PLUS loan borrowing limits are much looser than those on Direct Subsidized and Unsubsidized Loans. You can borrow up to the full cost of attendance, minus any financial aid that youve received, but the rates tend to be higher than Direct Loan rates.
Remember, a colleges cost of attendance includes tuition, fees, on-campus room and board, books, transportation, and other related costs.
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The Student Loan Charges Interest
Just like any other loan, the Student Loan adds interest to your balance. The interest rate is tied to how the economy performs and can go up or down. The figures are usually updated every September, but currently:
- For students from Scotland and NI, interest is 1.1%.
- For students from England and Wales, interest varies between 1.5% 4.5%* depending on whether you’re still studying or how much you earn . Interest defaults to 4.5%* if you don’t keep your details up-to-date.
* 4.2% during September 2021 only, due to the Prevailing Market Cap.
Added interest means you’ll end up owing more money than you originally borrowed and could take longer to repay. While that may sting a little, keep in mind that whether interest goes up or down makes no difference to your monthly repayments.
However, it’s worth noting that added interest could impact how long you make repayments for, including whether you repay it all before the loan is written off.
Although only higher earners have a realistic chance of repaying the loan in full, even for them a high interest rate would mean extra debt which then takes longer to clear.
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Our loans reporters and editors focus on the points consumers care about most the different types of lending options, the best rates, the best lenders, how to pay off debt and more so you can feel confident when investing your money.
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Apply For Hardship Funds
If youre really struggling for money, you may be able to apply for a hardship fund from your university.
Hardship funds are offered by universities to students who are experiencing serious financial difficulties, and usually the money doesnt have to be repaid. But when we say serious financial difficulties, we mean serious.
As harsh as it may sound, to ensure that these funds are only given to those who need them the most, youll need to prove to your uni that you really are struggling and havent just been irresponsible with your money.
This means handing over bank statements, Student Finance letters and proof of your household income to your uni to show that not only are you out of options, but that you havent frittered away your money away on a PlayStation and new TV.
You can find out more about hardship funds, including whos likely to qualify for help, in our guide to coping with a cash crisis.
Student Loans Do Not Go On Credit Files
When you borrow from a bank for a credit card, loan or mortgage, to evaluate whether they’ll make money from you lenders look at three pieces of information your application form, any previous dealings they’ve had with you and, crucially, the information on your credit reference files .
Most normal financial transactions and credit relationships you have are listed on these files yet student loans are not included .
So the only way loan, credit card or mortgage providers know if you’ve got a student loan is if they choose to ask on application forms. They can do this and it happens, but in general it’s only for bigger value transactions such as mortgages.
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Will Bigger Loans Lead To More Student Debt
While Student Finance helps pay for university, it does usually mean you’ll graduate owing thousands. But, because of the way repayments work, in reality, many students will only pay back a small part of what they borrow.
Use your predicted graduate salary and monthly repayments to see if the loan is right for you, rather than fixating on what you’ll owe. In the meantime, you absolutely do need a plan to deal with everyday debt such as student overdrafts, and other kinds of borrowing.
How Much Maintenance Loan Will You Get
The size of the Maintenance Loan you’re entitled to will depend on the following three factors:
It’s easiest to break things down by country, so just scroll through to where you currently live to see how big a Maintenance Loan you could receive .
And remember: your Maintenance Loan is provided by the part of the UK you normally live in, not where you will be studying. So, for example, if you lived in Northern Ireland but planned to study in Scotland, you’d apply for funding from Student Finance Northern Ireland.
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Can Student Loans Pay For Full Tuition
While it is possible for student financial aid to cover full tuition, in practice it will fall short. For most students, there will not be enough financial aid to cover the full cost of tuition, unless the parents borrow a Federal Parent PLUS loan. However, most full need students will be left with a gap of unmet need.
Federal Sources Of Financial Aid Per Year
Federal financial aid programs are provided through the U.S. Department of Education . Congress votes on how much money each program receives every year, and what the minimum and maximum amounts of financial support can be.
This grant has specific rules about working in certain fields and following certain classwork paths to become a certified teacher upon graduation. If you do not meet these standards, your grant will be revoked, and you may have to pay some or all of it back.
- Student loans: There are several loan programs provided by the federal government, including:
- Direct subsidized loans
- Direct PLUS loans, both for graduate students and parents with dependent undergraduates
- Direct consolidation loans
Loan amounts vary based on several factors, like:
- Whether you are a dependent or independent undergraduate student
- Whether you are a graduate or professional student
- Whether you have defaulted on student loan payments in the past
- Whether you have a significant financial need, qualifying you for subsidized loans
How much you can take out also depends on your academic year in school. Here are the current amounts set by the federal government:
You may also qualify for the federal work-study program, which helps you find a job, either on or off-campus, and pays you upfront so you can apply the income to your education costs. The amount you receive through this program varies by school.
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When Is Your Maintenance Loan Debt Cancelled
A big part of why were fond of the repayment terms for Maintenance Loans is that no matter how much or how little youve paid back, the balance is always cancelled after 30 or so years.
If youre from England, Scotland or Wales, your loan will be written off 30 years after you first became eligible to repay , while Northern Irish students will have their loans cancelled after 25 years.
No matter where youre from, your loan will also be written off if you have to claim a disability-related benefit and can no longer work .
What If I Still Need To Borrow More Money For School
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Your Student Loan Repayment Term
Your loan repayment term is the number of years you have to pay it back. Federal loans generally have a standard repayment schedule of 10 years.2 For , the repayment term can range anywhere from 5-20 years, depending on the loan. You’ll be given a definite term for your loan when you apply.
Interest rates for federal and private student loans
The average interest rate will be different for federal student loans and private student loans. Federal student loans have a single, fixed interest rate, which means that your loan’s rate doesn’t change over time.
You may have noticed that there’s a range of interest rates associated with a private student loan. Private student loans are . That means the rate you’ll be offered depends on your creditworthinessand that of your cosigner, if you have onetogether with several other factors. When you apply for a loan, you’ll be given an interest rate, either , depending on which is offered and which type of rate you’ve chosen.
How much you’ll need to borrow for college
If you’re wondering for collegewhether it’s a public university or private universitythe can help. You can search for college costs and also build a customized plan based on your own situation.
What To Do If You Hit Your Federal Loan Limits
If youve hit your annual or total federal loan limits, you can consider federal PLUS or private student loans. But first, it might be a good idea to:
If you decide to take out a private student loan, be sure to consider as many lenders as possible to find the right loan for you. Credible makes this easy you can compare your rates from multiple lenders in two minutes.
Find out how much youll owe over the life of your federal or private student loans using our student loan calculator below.
Enter your loan information to calculate how much you could pay
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Repaying Early Could Be More Expensive
You can choose to clear your student debt or make higher repayments at any time. This might be tempting if you want to be free of your loan ASAP, but it’s usually only worth it for higher earners .
For everyone else, it could mean paying back more than if you’d let the loan run its natural course. Plus, once you funnel extra money towards your loan, you can’t get it back later on . Think it over carefully and only pay up when you can afford to.
