Education Loans
Education loans are designed for people in the UK who require financial help when entering further education / higher education. A University education in the UK will soon cost around £3,000 under the top-up fee legislation to be introduced in England during 2006. Currently, University fees of up to £1,150 are charged up front. To meet the cost of education financial help is available from local education authorities, although this is reserved for the poorest students entering higher education only. For families whose income is over £31,973 no help towards tuition fees is currently available.
But, in 2006 the higher education system is changing. No longer will students have to pay up front for their education. Instead, they will need to take out education loans to pay back the cost of education once they graduate. Financial help is still available for the poorest students, however for the majority of people entering higher education the government is placing a higher responsibility on them to handle loans to pay for their education. This comes on top of any loans they need to take out to help them with day-to-day living expenses.
How much will higher education cost?
Student loans are currently available for up to a maximum of £4095. If living away from home in London students can get student loans of up to £5050. A lot of students struggle to survive on this amount of money each year, many already taking out personal loans or education loans to help them with their expenses. Given that from 2006 students must take out additional education loans to cover the cost of their education then it is easy to see how going to University might cost £10,000 per year or more!
Advice on education loans
Here are a few factors that you should consider before taking out education loans: -
Loan Amount - Commercial loans for higher education normally start at around £1,000. You could however borrow up to £10,000 on a single education loan. What you borrow is rather dependent upon your personal circumstances, suffice to say that the less you borrow then the less you'll need to repay!
APR - This stands for 'Annual Percentage Rate'. It is basically the annual interest rate that you will pay on any loans that you take out. The lower the APR then the cheaper the overall cost of your loans will be.
Repayment Deference - Some lenders of loans for higher education offer deference on repayment of up to 48 months, allowing you to begin repayment after your studies are complete.