Student Loans - The facts:

Who meets the cost of borrowing?
Under the Graduate Contribution Scheme it is the Government that meets the cost of borrowing and despite the rising standard of living amongst students over the past few years with increases in personal, entertainment and recreational travel expenditure pushing up their overall costs.   The student loan continues to do generally what it is intended to do – to meet basic living costs.

How do I apply for a student loan?
Student loans are handled by the Student Loan Company, a Government entity set up to administer the student loans scheme.
You will have to complete a series of applications were you or your family will have to declare your earnings. Considerations as to number of parents, dependant children, disabilities and location of study are also taking into consideration.

You can visit the Student Loan Company website here, where it provides details of what loans are available, how interest rates are calculated and how repayments are to be made.

Website: http://www.slc.co.uk
Address: 100 Bothwell Street, Glasgow, G2 7JD
Telephone: 0800 40 50 10
Email: la2.loan@slc.co.uk

But what about interest rates on my loan?
Unlike commercial loans (including Direct Line or First Plus for example), student loans are only up-rated for inflation to maintain the value of the loans in real terms.   Graduates do not pay any real rate of interest on their loans.   They only ever pay back what they borrow . Although the perception of debt is an adverse one by its very nature student debt is far and away from conventional debt and should, as the Government believe, be referred to as more of an investment.

Do I have to repay the debt as soon as i've graduated?
Yes, but it is worth noting that Student Loan Repayments are collected through the tax system and are based on your earnings, so as a graduates you will only pay what you can afford. It is normal that students do not make any contribution to their student loan repayments until they are earning more than £15,000.

If I am earning over £15,000 how much will I have to repay each month?
Of course the amount repayable will vary from case to case, but repayments are usually around 9% of income above £15,000.

I would like to go traveling when I graduate, will I have to repay my loan immediately? You will only have to start making repayments when you are earning £15,000 or more. If for any reason your earnings fall below £15,000 at any point, then your payments will stop. This is particularly beneficial for those taking career breaks or wishing to go traveling after graduating. It is also worth noting that there is none of the worry that the debt will suddenly be “called in” like commercial banks and lenders.

How long after graduating will I have to repay my loan?
Graduates can take as long as they need – taking into account their earnings, students will never be forced to pay more than they can afford with the average repayment periods being some 13 years after graduation.

13 years? I wont be able to get a good mortgage until I repay the debt!
Not true.   The Council of Mortgage Lenders has said that, on the basis of the current repayment schedule for student loans, the existence of an outstanding student loan is unlikely to have any negative bearing on the graduate's ability to obtain a mortgage. Please bear in mind that this does not consider debt accrued through bank overdrafts, commercial loans and credit cards.

What about my other debt, including my student overdraft and credit cards?
Student Overdrafts and Credit Cards and completely unrelated and can be called in by your bank or financial institution at any time. Upon graduation, try to repay your overdraft by as much as you can afford each month, as you will be charged a greater amount of interest of the final balance as you are no longer a student and as such do not get the low interest perks of a student account.

info@clearstudentdebt.co.uk