Paying for a BSc (Hons)...

MoneySavingMole · 11 July 2018 at 5:42PM

Hello,

So, a little background on me, to hopefully give you an insight of why I'm having a predicament...

- I'm currently earning £40,000+ and I'm looking at a career change.
- The career change will involve me studying alongside my existing career, until I'm qualified, and I can then step over with my new qualifications, in to my new career path.
- The course will be 4 years, part time.
- The career change will likely see me drop to £25-28,000 for 12-24 months as a Graduate, before I can climb the ladder and get back in to the £30-40,000+ range.

I have never been to University and have therefore, never had Student Finance etc. and I believe I am entitled to apply for Student Finance (SF), as I've never received it before.

The course will be around £20,000 and I have £5,000 in savings.

Student Finance Calculators suggest a £20,000 loan could be £30,000 in repayments.
- This could well be repayments of £60 per month drip feeding over 30 years

A personal loan at 2.9% (John Lewis) for £15,000 over 5 years would be £16.500 in repayments.
- This would likely be £300 per month over 5 years.

The biggest concerns I have are;
- if I was to take a personal loan - I'd be down £300 per month, for the 4 years of the course (albeit on £40k+), plus 12 months as a Graduate (on £25-28k).
- if I take SF, they say interest is accrued daily - I'd feel like this will be a neverending debt!

I know the MoneySavingExpert answer is the pay the least interest... so, personal loan & savings.

But, what has everybody else done to fund their Uni fees?

Has anybody else been in the same boat?

How does Student Finance affect future mortgages for existing buyers?

:beer: Cheers! :beer:

buythedip · 11 July 2018 at 5:48PM

What type area is this in? Have you got enough experience to just lateral across to a starting role? Or do you need to be degree qualified? Why do you want to change career? Just curious!

A mate of mine is a scientist and is currently taking an accounting course because he wants to work with numbers... He's been working with data and performing statistical analysis for years...

campbell19925 · 11 July 2018 at 5:57PM

https://www.moneysavingexpert.com/students/should-i-get-student-loan/

This is a great post that you can read to look for pro's and con's of each. Only you can make the decision though.

Student finance probably easier, you know you'll be accepted and it doesn't appear on your credit file and you only repay when/if you earn. I've been paying student finance back on a 45k+ year job and I dont even realise it comes out really. Its about £300 per month on my salary and if you pay it at quite a quick rate you wont accrue that much interest. I think once mine has run out (my debt was 18k - pre 2012) I will have paid just over 3k interest.

MoneySavingMole · 11 July 2018 at 5:58PM

I work in Construction - I'm looking at side-stepping in to Surveying.
I've been in the industry for 20 years and I've decided I'd rather push a pen than do the physical work.

I could afford a pay cut for 12-24 months if need be, as everything else is manageable, so I decided now is the best time to take the leap!

MoneySavingMole · 11 July 2018 at 5:59PM

Thanks

I know I'll ultimately have to make the call, but it's nice to gauge others opinions.

I appreciate you giving me an idea of your own situation (45k/300pm)

Lorian · 11 July 2018 at 6:07PM

You can do a BSc(Hons) part time in 4 years? in a proper subject?

Sncjw · 11 July 2018 at 6:28PM

Student finance will be better and the money paid back is based on earnings and if you earn under so much to don!!!8217;t need to pay money back where as a loan you will be paying back from day dot and will be expected to if your not working

HHarry · 11 July 2018 at 6:45PM

Lorian wrote: »

You can do a BSc(Hons) part time in 4 years? in a proper subject?

Yep, I did mine in Engineering. It was a 6 year course, but you can skip the first 2 years with the right qualifications & experience.

Actual formal teaching time was actually only about 4-6 hours less a week than the full timers.

sheepy21 · 12 July 2018 at 7:23PM

Honestly, take the student finance. It's easy, you have to earn over x amount before repaying and god forbid you became ill or something, you never have to worry about the finance! I think a personal loan is far more of a millstone, but that's just my opinion.

Nebulous2 · 13 July 2018 at 7:21AM

It would be possible for you to combine the two options.

When does the course start? You could cut your expenditure at the moment before it starts. Aim to save at least the £300 a month you would pay on the loan.

Keep a buffer for emergencies, but you should be able to pay part of the fees from savings and part from a student loan. Keep saving the £300 a month while you study and maintain your earnings. If the interest on savings / regular savers is higher than the student loan interest you can save the money. If the interest on the student loan is higher you can use the £300 to make voluntary payments to the student loan.

When your salary drops you can stop the voluntary payments and only make any payroll deductions you are due. After your salary rises again review the situation and decide to either:-

1) pay student loan through payroll until completed
2) make more voluntary contributions to pay student loan faster
3) take personal loan to pay student loan off

A student loan has limited impact on a mortgage. Lenders expect many people to have student loans and they appreciate their flexibility. If circumstances change and you cannot work for instance payments stop.

I have a relative whose salary jumped and as he had some savings he paid off his student loan.

Good luck. Changing career can be hard. I'm firmly of the view it has most chance of success where you switch to a related career rather than a complete change of industry. It sounds as though you are going into it with your eyes open.

nic_c · 13 July 2018 at 9:24AM

Whether you take a loan or SF, interest is accrued daily!

With The loan option if its over 5 years it means a high cost going out whilst you are studying and afterwards when you take a pay cut. It has an effect on ability to take other finance, e.g. moving house if need to relocate for your career.

SF takes longer but repayment are linked to income, useful for when yours drops, does not affect affordability for remortgage should you want to relocate after graduation for the job change.

I would go SF, saving the money during the 4 years that you would have used to pay the loan as a savings buffer. Giving you options upon graduation to use it for your career change or simply to make a lump sum payment of your SF loan. Also gives you options to change mid course, for instance if you find doing the course and fulltime too much, could you take a cut in hours - maybe for the last year to put more time into achieving the best results (saving could allow you to take a 6 month sabbatical or go part time to put more effort into final year project etc)

SF is more akin to a graduate tax. You say you have been in the industry 20 years, so after another 4 years how many years left until retirement? You could simply see SF as a £60 graduate tax (less when you are earning less). You may want to fund a pension too. It could well be that the SF is not paid off by the time you plan to retire, which is fine if you think in tax terms as when you stop working you stop paying.

Paying for a BSc (Hons)...

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