With University tuition fees in the UK currently some of the highest in the world higher education remains the ever popular political football. A possible change of government may mean a reduction in costs for students but at the moment, this is just a political promise. Students reaching the age of eighteen need to make sensible and informed choices for their future. This article will consider all of the different options available to students as they reach out into the world of higher education.
How much does University really cost?
University costs are divided into two main components; there are the tuition fees which are the charge from the University for the degree course and then living costs which is everything else associated with the period of study.
Tuition fees are the costs that the course provider charges for the degree course. Degree courses vary in length but are usually three or four years in duration. Some subjects such as Medicine and Veterinary Science may be five years. Universities and higher education providers are allowed to charge up to a maximum per year of £9250, many do charge this amount but some are less expensive. The important thing to grasp is that these fees do not have to be funded up front. Every student is entitled to a government Fee Loan regardless of their parents’ financial situation. This covers the cost of the fees in their entirety and is paid back by the student after they have graduated.
All the other costs associated with University study are perhaps more troublesome because they are variable and less well defined. These will include accommodation – this may involve living in halls of residence on campus, or a house share off campus or staying at home if it is nearby. Food and all the usual life costs have to be provided for, transport costs covered if the student is running a car or travelling on public transport to a campus, clothing, books and course materials which crucially are not part of the tuition fee cost and of course a budget for a social life. Living costs can vary hugely but do offer an element of choice and control. A room on a University campus may initially be more expensive but it could include catering which becomes a defined cost and there will be no associated travel costs from a location off campus. Some students opt to study at a University near their home and will live at home, only incurring travel costs to and from the campus.
A Fee Loan is available to every student and covers the cost of the fees charged by the institution they are attending. There is a second student loan available called a Maintenance Loan and this is means tested based on household income. This can be used to put money towards any living costs such as accommodation, travel and food. The Maintenance Loan can be applied for in the spring prior to University entry that autumn so a student should have a clear idea how much money they will be offered and can budget accordingly. Maintenance Loans are only based on parent’s financial means; they do not reflect any specific costs for example, the fact that accommodation may be more expensive at one University than another. Maintenance Loans are rarely enough to cover the full cost of living during term time and so this has a big influence on where students choose to study and how they decide to live whilst they are at University. Students usually top up with either a part-time term time job whilst some work in their holidays to save for the following academic year. Some parents are able to top up their son or daughter’s Maintenance Loan.
Paying back Student loans
Many students worry about the size of the loan they are incurring to study at University. They are concerned that they will graduate with a millstone of debt around their neck which will remain with them for years. Tuition fee loans have a maximum value of £9250 per year and the Maintenance Loan can offer up to £8430 per year although this may vary according to means testing. You do the Maths! That is a big figure after a three year degree course. And interest is charged on the outstanding loan amount as well. The amount of interest charged will vary according to how much salary is earned after graduation – the higher the salary, the higher the interest rate.
The loan is repaid from salary and payments do not begin until a student earns at least £25,000 per annum, a recent increase to the threshold. The debt is live for thirty years and students remain liable for a thirty year period or until the amount is fully discharged whichever is the sooner. Payments are deducted from salary at source a bit like income tax.
According to the Student Loan Company, their latest figures reveal that you make repayments on any amount above the threshold. In other words, you will pay out of your salary 9% on every pound earned over £18,330.
|Income||Monthly salary||Student loan repayment per month|
|Up to £18,330||£1,527||£0|
The figures may not seem high, but the problem is that this debt is a long-term one. With such ‘low’ repayments, the debt will hang around for decades, accruing interest too. And, as your salary climbs, you won’t realise the full benefit until you have paid off the student loan.
Even though there is the minimum salary threshold to consider before you start making repayments, it should also be noted that you could start to make repayments below the threshold, depending on how you are paid. This is because there is a weekly, fortnightly and 4-weekly threshold to consider too and if your earnings before tax climb above this, you are liable to start making repayments.
This would affect people who work in careers where hours are flexible so, one week you could earn above the threshold, but the following week earn less. You would make a repayment on your loan in one week but not the following one. It is a complex system and one that many university students struggle to deal with.
In the last twenty years or so, home learning has been a huge development in society facilitated by the internet. Gone are the days of sending assignments back and forth by post, now entire courses can be studied on line with face to face support from tutors via a range of different media.
Studying from your home has the potential to save a huge amount of money. It is also a lot more flexible allowing the management of other things around course work such as a job or family commitments. There are no additional living costs for accommodation, no extra food costs and no travel expenses so this essentially immediately halves the amount of money a student will need to spend compared to the cost of living away from home at University.
Home learning used to be viewed as the poor relation when it came to gaining additional qualifications but that has long since ceased to be the case. The internet has resulted in huge growth in this sector with competition amongst providers to offer the best accredited courses at the most competitive prices. Generally home learning courses are much cheaper than University education and market leaders such as NCC offer payment plans which mean you can spread the cost and clear the cost as you go along so that you are not left with a large debt after you have finished studying.
NCC www.ncchomelearning.co.uk offer accessible courses many of which do not require a prior entry qualification unlike University and they have superb links with both colleges of further education and employers to help students develop their chosen pathway.
Home study is far cheaper than University so students will not require a Fee Loan. Payment plans mean that courses are instantly accessible to those on low budgets with a very affordable initial deposit and manageable monthly payments. Because students can study at their own pace, this means they can in effect control the costs far more effectively than with a University education with its set academic terms and fee structures. Students can study when they are funded and when they have the opportunity around other commitments. Not surprisingly, home study is becoming increasingly popular because of its cost effectiveness and flexibility. Courses are on a par with those offered by the main institutions and it can be possible to attain an identical qualification by studying at your own pace and without incurring huge costs.
So which is best, University or home learning?
There is no doubt that when it comes to the financial costs, home learning is significantly cheaper than University, in reality, a fraction of the price due to a mixture of less expensive course fees and the ability to study from home which reduces so many if not all of the ancillary costs.
Here is a comparison of the figures for one academic year
|Type of Cost||University||Home Learning|
|Ancillary costs, books etc||£1,070||Usually included|
|Accommodation and living||£12,056||£0|
These figures are based on the standard academic year of 39 weeks and are taken from data provided by the National Union of Students for the academic year 2012/2013. The data is crunched from students in higher education right across England so have already taken into account the variation in tuition fees charged by different Universities and the spectrum of accommodation charges. The home learning course fees are taken from the NCC home learning website as an average and are per course not per academic year which actually makes them even more competitive.
Clearly, the financial burden of a University education is huge compared to studying at home. However, there are many other advantages to home study than just the cost. Home learning institutions also offer flexibility in learning choices so it is possible to mix and match subjects in a way which University may not accommodate. Students can pick up life skills modules alongside other studies so improving literacy and writing skills for example, studying creative writing in tandem with an English Literature course https://www.ncchomelearning.co.uk/interest-courses/creative-writing/. Or perhaps add in an interest or specialism to a career orientated course for example, alongside the study of psychology it might be interesting to also look at criminal profiling. www.ncchomelearning.co.uk/interest-courses/criminal-profiling/ There is control over modules and options and study can be fitted in around family commitments and work. And home learning can often result in a qualification that is on a par with a University degree. So, in these uncertain times with University more expensive than ever, it is good to know that there are some really cost effective and comparable alternatives in the marketplace on offer to young people. You can achieve the same higher education result without incurring enormous debt and costs.