Cash cool

With the law degree fee hike here to stay, Christian Metcalfe talks you through the financing options

Whatever your views about the radical changes to undergraduate tuition fees and student funding that took place in England last year, the fact is they are here to stay. But while the bill must be paid there is no reason to be confused or discouraged about the options for funding your degree, as there is help out there.

A recent survey of Year 12 students by Lawyer 2B found that more than 70 per cent were not put off going to university by the changes.

Funding

“Finance isn’t a problem for me,” says student Alex Barnes of Bexley Grammar School. “I’ll take out loans to go to university and once I start working I’ll pay them back.”

This response is typical of students’ can-do attitude and the feeling that if something is worth having then it will have to be worked for. So, if you are one of these students, what are the options?

Tuition fees

Last year, the Government started allowing universities to charge fees of up to £9,000 per year. However, universities are free to determine how much they charge up to this amount, so you should check the cost with individual institutions.

Not all universities have decided to charge top whack, with nearly two-thirds charging under £9,000. For example, the London School of Economics, a member of the Russell Group of top-flight universities, will charge £8,500 a year for all of its undergraduate degree programmes starting in 2013.

A student loan for fees will cover the full amount of your fees. For 2013-14, the amounts available are: up to £9,000 for new full-time students; up to £6,000 for new full-time students at private universities or colleges; up to £6,750 for new part-time students; and up to £4,500 for new part-time students at private universities or colleges.

As with the loan for maintenance (living) costs, you do not have to start paying back your loan as soon as you graduate. Full-time students only need to start repaying in the April after graduation at the earliest, no matter how long the course.

You also do not need to pay back fees until you are earning above £21,000 per year, then each month you will have to pay 9 per cent of your income above that threshold. If the debt is not paid back by 30 years after graduation it will be cancelled.

The interest rates payable on the loan will depend on many factors. There will be a progressive tapering system, where those with incomes of £21,000 or less will have an interest rate set at the retail prices index (RPI), rising to 3 per cent plus RPI for incomes above £41,000.

Living costs

The student loan programme also covers living costs but the amount you receive depends on where you study and whether you live independently or with family. The maximum maintenance loan for new students starting from 1 September 2013 is £7,675 if you live away from home and study in London; £5,500 if you live away from home and study outside London; and £4,375 if you live at home.

Students can apply for either 65 per cent of the maintenance loan without having their household income taken into account, or the full maintenance loan as well as a maintenance grant and special support grant if they apply for finance that does take household income into account.

The maintenance loan is normally paid in three instalments – one at the start of each term – straight into a student’s bank or building society account.

For information on how much you might be entitled to, go to www.direct.gov.uk/studentfinance.

Bursaries, scholarships and grants

Unlike loans, bursaries, scholarships and grants do not have to be repaid.

The first stop for grants for full-time students is the government maintenance grant (part-time and EU students cannot apply).

You have to give details about your household income and your course start date. Provided you complete your course, you do not have to pay back the grant, but any grant you get will reduce the maintenance loan you can get.

For students starting a course in 2013/14, the maintenance loan offered will be reduced by 50p for every £1 of maintenance grant they are entitled to. There is a maintenance grant calculator at www.gov.uk/student-finance-calculator.

For courses from September 2013 the grant will be: £3,354 for households with an income of £25,000 or less; £2,416 for an income less than £30,000; £1,478 for an income less that £35,000; £540 for an income less than £40,000; up to £50 for an income less than £42,611; and no grant for an income over £42,611.

You could get a special support grant instead of a maintenance grant if you qualify for Income Support or Housing Benefit or, for example, you are a lone parent or have certain disabilities. The amount you get is the same as the maintenance grant but it will not reduce the maintenance loan you can get.

Any money a student gets through the special support grant will not be counted as income when working out entitlement to benefits or tax credit.

As well as government grants, most universities and colleges offer bursaries and scholarships to help students with tuition fees, accommodation and other expenses.

Details of available funding, criteria, application processes and deadlines can be found on the websites of individual universities and colleges. Remember to check both the university awards available to all students as well as those awards offered only to law students.

For example, among some of the undergraduate awards available at King’s College London are those under the Dickson Poon Scholarship Programme. This programme, part of a £20m gift to the law school by Hong Kong-based philanthropist Dickson Poon, offers 75 scholarships to law students and is available to all students regardless of background. Twenty-five of the scholarships are worth full home/EU fees for all years of study, while the remaining 50 are worth £18,000 over three years.

Under the National Scholarship Programme, students from families on a low income – up to £25,000 a year – can apply for bursaries from their universities to help cover tuition and maintenance fees. The Government’s contribution to the programme will be £100m in 2013-14 and £150m in 2014-15. Contact your target universities to find out if they are participating in the scheme.

The bursary can be one or more of the following: a cash bursary of up to £1,000; help with tuition fees and accommodation; or a free foundation year (a programme that helps students meet the entry criteria for a higher education course).

As well as a bursary from your university, if you have been in local authority care, you can also apply for a one-off bursary of £2,000 from your local authority.

If you have children or dependant adults you may be able to apply for additional grants to cover care. Those in full-time higher education with children under 15, or under 17 if they have special educational needs, can apply for a childcare grant of up to £148.75 a week for one child and £255 a week for two or more children.

Full-time students with children could get up to £1,508 a year to help with their learning costs. This is called Parents’ Learning Allowance and can help pay for books, study materials and travel. How much you get depends on your household income.

A student with a disability, health condition or specific learning difficulty may also be able to benefit from Disabled Students’ Allowances.

So, despite the frightening headlines, there is help out there for those who may be put off going to university because they think they cannot afford it. While university may not be for everyone, how can you decide unless you understand the true cost.

Calling all scholars

Once you are on your course, if you have a particular interest in an area of law look out for bursaries attached to that area.

The Human Rights Lawyers’ Association (HRLA) bursary scheme, for example, provides funding for law students to undertake work placements related to human rights law that they would otherwise be unable to afford. Work can take place outside the UK but must have direct relevance to developing human rights law, practice and procedure in the UK, and applicants must demonstrate they are committed to finding employment, or practising as a lawyer, in the UK in the human rights field in the future.

For more information go to www.hrla.org.uk. A single award will not normally total more than £1,000.

Have brain, will travel

Studying abroad is another option. There are universities in Europe that offer law degrees in English at a fraction of the price of UK courses, plus students can get grants and perhaps even halls of residence.

Also, spending time in a foreign EU country will not only bring the benefit of having a different degree to other UK applicants, but also of possessing a good grasp of the language of the country of study.

But be aware – if you do study law outside the UK you need to make sure the qualification is recognised here, otherwise you will have to complete another year of study on a graduate diploma in law to progress to the vocational courses. The expense of which is likely to wipe out any savings you may have made studying abroad.

Commercial vs student loans

Although you do not have to take out a tuition fee loan and you could pay it directly, for many, paying tuition fees upfront rather than taking the loan risks leaving them worse off financially. See www.moneysavingexpert.com for more.

While you may be tempted to borrow from elsewhere, unless it is from the bank of mum and dad, there are a good few reasons why student loans are a better bet than taking on commercial debt: student loans do not go on credit files; repayments are proportionate to income; if you lose your job or take time off, you do not need to repay them; they do not employ debt collectors; you cannot lose your house if student loans are not repaid.

Charities and other grant-making trusts

Your local authority awards officer will have information about local charities and any grant-making trusts for which you may qualify. A searchable database of benefits and grants is available online at www.turn2us.org.uk.

However, qualifications for these awards vary enormously and usually provide only small amounts of money so should not be relied on to provide full financial support for either tuition or maintenance.