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To go to uni or not to go to uni?

graduating

That is the question being asked by many young people right now.  With rising tuition fees, cuts to grants and serious questions over repayments and interest, many are asking whether to go to uni or not go to uni is the best option.

University tuition fees – what you need to know

University fees were first introduced in 1998 and they were set at £1,000 a year. Now in 2016, they are £9,000 a year and the government has confirmed plans to allow universities to increase their tuition fees beyond the already massive £9,000 a year at a time when many young people argue that going to university costs too much already.

Maintenance loans – what you need to know

Maintenance grants, which were non-repayable support for less affluent students of up to £3,387 per year, were scrapped recently. These grants used to help with costs such as rent, food, energy bills and study materials.

No if you go to university and need extra financial support, you have to take out additional, maintenance loans, which are repayable.

Loan repayments – what you need to know

When you apply for student finance and start university, you, like most other young people, probably have very little understanding of the financial commitment that you are making.  When you think about it, the level of commitment that you are undertaking is similar to that which someone of your parents’ generation would be committing to when they bought a house!

In the flush of excitement that you will indubitably experience as you prepare for study at university, the chances are you won’t give too much thought to the debt that you are getting yourself into, although many more are now seriously thinking about whether they want to being their life after education in such massive debt.

Your tuition fees and your (now repayable remember) maintenance loan are not borrowed interest free. From the moment you first receive a payment (so when you start uni) you are accruing interest based on the retail price index (RPI) + 3%. Once you graduate, you will still be being charged interest up until you finish paying off your debt in full.  The rate of interest that you are charged will depend on how much you earn though – so if you earn between £21,000 and £41,000 you will be charged interest at a rate of RPI + up to 3%, if you earn £41,000+ you will be charged RPI+3%.

What is RPI?

RPI one measure of the rate of inflation, the other is CPI (the consumer price index) – To find out more about inflation and interest take a look at this article.

The RPI is not static. It is updated each September; hence it can go up or down, affecting the amount that you will end up owing and repaying.

Make sure that you understand what you are getting yourself into and that it’s worth it.  Simon Crowther is a civil engineering graduate who has accused the government of miss-selling loans to young people and has argued that he would have to be earning over £41,000 per year just to cover the interest payments alone.

Alternatives to full time university study

If building up massive debts and interest that makes it all but impossible to even make a dent in repaying your tuition loans puts you off going to uni, then perhaps it’s time to look at alternatives. These include studying for a degree or other HE qualification at your local college of FE, where fees tend to be lower and you may not have to move away from home, studying part-time or distance whilst working and earning, choosing to take the apprenticeship route or looking for a school-leaver programme.

About Lynette Daly

Lynette is the publishing editor of Moving On magazine. Moving On is devoted to helping young people make good choices for their future – education, qualifications and careers. Moving On really wants to motivate you! Our articles cover a range of topics to inspire and give ideas. Our magazines are delivered free to all schools, colleges and sixth forms in England and is also available online.

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