Student loan

running2021

Hi all

looking for some guidance on securing a student loan to finance an OU course starting sept/Oct this year. When can I apply for student loans for 2021/22? I can’t see anything on the government website. Any guidance much appreciated.....! 

es5595

So I’m assuming you’ve already registered with the OU, head here next; 
https://www.gov.uk/student-finance-register-login
There is lots of information on studenthome about applying for finance. 

Obviously I don’t know your situation, but as a mature student, already earning, I knew I’d have to pay it back, and the interest rate from SLC is horrifying. I therefore took out a 0% credit card and used that for the fees, which might be something you want to consider. 

MalMonroe

It depends whether your course is undergraduate or postgraduate, full time or part time. There's some OU info here : http://www.open.ac.uk/courses/fees-and-funding

Info here from this very mse site : https://www.moneysavingexpert.com/family/grants-education/

This government site is quite comprehensive, I think : https://www.gov.uk/student-finance

There doesn't appear to be any panic about applying for funding - and the government site says "You do not need a confirmed place to apply." 

You may, as es5595 suggests, be able to get a 0% interest credit card to use for payment but I guess the limit will have to be fairly generous. 

running2021

Hi

many thanks for taking the time to reply. Much appreciated. Both really helpful. 

I am going to be a mature student I guess, being 51. I’m hoping to register for a BSc course starting in September/October, as an undergraduate. Registration opens in a few weeks. 

I’m hoping the student loan is going to be a way forward. My understanding is that you don’t start repaying until you have completed the course? But I might have read that wrong. 

Will read up more on the info you have both offered. 

Thanks again. 

Mrs_Ryan

Current OU student here. 

Part time applications usually open around summer time. Do not apply for full time loan as that is incorrect. If you intend to study over 6 years, then you are correct in saying that you do not repay the loan until you have finished studying and earn over a certain amount. 

The 0% credit card is a very bad idea. I don’t know of any 0% credit cards with a rate that lasts over 6 years...! 

es5595

So with a student loan you’ll accruing interest at RPI + 3% for the first four years if you’re studying part-time. That’s currently 5.6%. 

Then the rate depends on how much you’re earning;

Your annual income	Interest rate
£26,575 or less	RPI (currently 2.6%)
£26,576 to £47,835	RPI (currently 2.6%), plus up to 3%
Over £47,835	RPI (currently 2.6%), plus 3%

Hence the pretty important question of how much you’re earning. Also of your credit rating for a 0% card. And no, @Mrs_Ryan you wouldn’t get one for six years, you’d take out a 0% spending and then moved to a 0% balance transfer. It’s a little bit of work, but significantly better for a lot of working mature students than they’d be paying in interest!

You also said you’re 51, so that factors in as well, because whilst a student loan won’t get written off until 30 years past the date of commencement, if you’re earning under £2,214 a month, you make no repayments. Therefore, if you’re winding down to retirement, and depending on how much you’re expecting to earn over the next 30 years, a student loan could make sense as you’ll never repay the full amount you borrowed, whereas you would have to with a credit card. 

Also, should the worst happen, your credit card debt would come out your estate, but a student loan will be written off. 

There are quite a few variables to consider!

davidw123

es5595 said:

So with a student loan you’ll accruing interest at RPI + 3% for the first four years if you’re studying part-time. That’s currently 5.6%. 

Then the rate depends on how much you’re earning;

Your annual income	Interest rate
£26,575 or less	RPI (currently 2.6%)
£26,576 to £47,835	RPI (currently 2.6%), plus up to 3%
Over £47,835	RPI (currently 2.6%), plus 3%

Hence the pretty important question of how much you’re earning. Also of your credit rating for a 0% card. And no, @Mrs_Ryan you wouldn’t get one for six years, you’d take out a 0% spending and then moved to a 0% balance transfer. It’s a little bit of work, but significantly better for a lot of working mature students than they’d be paying in interest!

You also said you’re 51, so that factors in as well, because whilst a student loan won’t get written off until 30 years past the date of commencement, if you’re earning under £2,214 a month, you make no repayments. Therefore, if you’re winding down to retirement, and depending on how much you’re expecting to earn over the next 30 years, a student loan could make sense as you’ll never repay the full amount you borrowed, whereas you would have to with a credit card. 

Also, should the worst happen, your credit card debt would come out your estate, but a student loan will be written off. 

There are quite a few variables to consider!

I agree, I also think its foolish to use a CC to pay for a student loan; if your earning over 47,835 PA, you'd be charged 9% on the remaining £21620 which results in rough 2K a year to student finance to pay back anyway, without concrete commitments. If its a tuition fee and a maintenance loan and you take roughly 15K for a year you'd be finished with SF within ten years regardless of interest rates, and if its three years of 15K you wouldn't ever pay it back anyway.

Additionally every time you transfer your balance; your being charged a fee by the new and old supplier for this balance transfer, going through credit checks etc and using a balance that you otherwise wouldn't need.

Cons;
A credit card will be on your record, go against you on a mortgage application and impact your available credit long term.
A credit card will still be required to be paid regardless of income, and context - made redundant? Didn't put the education to use for that promised high paid job? New family member? Health or household emergency? - it still needs to be paid.
Doesn't get wiped, nor can it be offset with pension payments to reduce the monthly payment.
Inconvienent.