Students attending colleges and universities part-time to study for a higher education qualification will be eligible for a government loan for the first time from September.
The move is expected to affect around 70 new students embarking on HNC and Foundation Degree courses at Leek College this year. It means that less well-off students will only begin paying for their courses when they are earning over £21,000 a year rather than paying upfront for their studies.
The college will be charging £3,000 per year – a total of £9,000 over a three-year course – but, for the first time, students will be able to defer payment until after they have finished studying.
Val Smith, Leek College’s Director of Student Support, explained: “Up until now, students studying part time at higher level have had to pay their tuition fees upfront.
“We know that students have found that a real barrier to studying as it can be hard for someone on a low, or even average, income to find the money. We have even had students taking out expensive commercial loans to fund their courses.
“We are pleased that would-be students will no longer need money in the bank in order to study and they will not have to repay their loans until they are in well-paid employment. We prefer to think of the repayments as a tax as they are only taken once a student is earning over £21,000 and, for example, those on salaries of over £25,000 will pay just £6.92 per week – the cost of a bottle of wine.
“The message we want to get across is that Higher Education is still a great investment for young people and mature adult students alike. It can really boost your career prospects and, by studying on a part-time basis, you can earn while you learn. Taking out a student loan does not affect your credit rating so it doesn’t count when it comes to such things as applying for a mortgage and, although we agree that, in general, debt’s not a good thing, a student loan is very different to taking out a loan to buy stuff you don’t really need.”
Interest on the loans will be charged at the rate of inflation plus 3% up until the April students are due to start repayments then the rate drops to the rate of inflation for those earning £21,000 or less and a maximum of inflation plus 3% for those earning above this figure.
Repayments are deducted from salaries through the tax system and any outstanding balances are written off after 30 years.
Students already in the system will continue to receive a fee grant if their household income is less than £28,066 and those with disabilities may qualify for Disabled Students’ Allowances.