Student finance: Your guide to understanding the jargon

12 Aug 2020
By Ashlea D., Student at Liverpool John Moores University

It’s no secret that applying for university can be a complicated process. And then there’s the part about how you’re actually going to pay for your studies. It all seems pretty daunting, doesn’t it?

With forms upon forms full of complicated jargon, it can be difficult to make sense of everything. But there’s no need to worry. This article will decode even the hardest terms and provide some top tips for getting your student finance in order.

First, what’s student finance?

When people mention student finance, they tend to mean the type of loan that you can use if you’re going to uni or attending a higher education institution. It can help with lots of the costs that come with studying at university, such as books, tuition and rent.

Despite it being a ‘loan’, it won’t impact your credit score, but lenders could ask about it when you take out loans or apply for a mortgage in the future.

When applying for student finance you may see a range of abbreviations and company names, which can be confusing. Here’s an explanation of some of the most common ones:

  • Student Finance England (SFE) - If you live in England, this is the organisation that you’ll apply to and which will decide how much support you’re entitled to.
  • Student Awards Agency Scotland (SAAS) - If you live in Scotland, this is the organisation you’ll be applying to for your student finance loan.
  • Student Finance Wales (SFW) - If you live in Wales, this is the company you’ll need to apply to for your loan.
  • Student Loans Company (SLC). This is the organisation that actually provides the finance for students in the UK.

What’s the difference between a tuition fee loan and a maintenance loan?

A tuition fee loan is equal to the cost of your course fees. Universities in England can currently charge up to £9,250 for a course, but the money from your loan doesn’t go into your bank account and is instead paid directly to your university in three instalments each year.

A maintenance loan is the means-tested/income-assessed loan that you receive directly. It’s intended to help you pay for rent, food and any materials or books that you may need to complete your course. This is also paid into your bank account in three instalments throughout the year.

What does means-tested and income-assessed mean?

Means-tested or income-assessed means that a student finance organisation will look at the household income for the address that you live at and work out how much additional support you’re entitled to. If you live with one parent or a partner, your entitlement will be based on their income, but if you live with two parents/step-parents your loan will be based on their combined income.

The assessment is based on the tax year before last, unless the income of the household has dropped by 15% or more, in which case you need to let your student finance organisation know. It’s also worth noting that you’ll get more if you plan to live away from home while studying.

Depending on your household income and where you live in the UK, you may get a maintenance grant or bursary as well as a maintenance loan. Unlike the loan, you don’t have to pay the grant back when you start earning after university.

Non-means tested refers to the amount of money you can take as a loan if you haven’t submitted information about your household income. All students have access to this type of loan, but it would probably mean that you’ll get less than you are entitled to.

Is there anything else I could be entitled to?

Yes, potentially. Here are several other ways you may be able to get funding to help you through your studies:

1) Disabled Students Allowance (DSA) - This is awarded to eligible students in order to assist with any additional costs that come with physical disabilities, mental illnesses or learning difficulties. Applications are completed through your student finance organisation and can be done when you get to university. The student support services will be able to provide more help and advice on this.

2) Bursaries - This is a sum of money that a university may pay you if you match any of their criteria, such as household income, academic performance or sporting ability. It’s typically paid in instalments across the year and the amount can range from a few hundred pounds to several thousand, which you won’t have to pay back.

When completing your student finance application there is a box that you can tick which allows your household income information to be shared with your university. Tick this and it will help your university determine if you need extra financial help. And remember, you can always contact student services directly to talk about any extra support.

3) Scholarships - Again, this is a lump sum paid in instalments that doesn’t have to be paid back. These are usually awarded for academic, sporting or community excellence, or a particular talent in music or art for example.

Some universities also offer specific scholarships for care leavers or refugees, or to encourage studying a particular course. Although numbers are limited it is definitely worth applying, as it could be a big financial help through your studies. Applications are made through your specific university and, despite it feeling unnatural, you really have to sell yourself.

But it’s not just universities that offer scholarships. For example, the Unite Foundation offers scholarships to care leavers or people estranged from their families, providing free accommodation with Unite Students throughout their entire degree. The key here is to make sure you do your research.

4) Benefits - You could also be entitled to additional benefits if you live alone, have a child or are responsible for another dependent, or if you are disabled. Make sure you check with your local authority to see if you are eligible.

My accommodation has asked for a guarantor, what does that mean?

A guarantor is someone who acts as a guarantee that if you can’t pay your rent, they will pay it for you.

Why wouldn’t my loan cover my accommodation?

Depending on the amount that you’re entitled to, your maintenance loan might not necessarily cover your accommodation costs. This is because the government also expects parents, carers or students themselves to supplement the additional costs of uni.

As this isn’t always possible, many students choose to have a part-time job alongside university. In fact, in many of the UK’s cities you’ll find students working in retail, hospitality or for the university itself. Another option is to get temporary jobs in the holidays and using your pay to supplement your student lifestyle.

If you’re living with Unite Students, you could even become one of our paid student ambassadors. Find out more here.

What is a student bank account and why do I need one?

A student bank account, as the name suggests, is a bank account designed especially for students. It usually has low or no overdraft fees and many of them also have perks for joining. These perks can include railcards, discounted coach passes and even free money for signing up. It’s definitely worth looking into!

So, that’s student finance in a nutshell. Although it seems complicated and daunting, once you’ve got the hang of it, it’s a massive weight off your shoulders and allows you to begin budgeting for the year. Good luck!

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I’m currently studying criminology and sociology at Liverpool John Moores University, (my main interest being crime and my favourite city being Liverpool!). In my spare time you’ll probably find me dying my hair a random rainbow shade, watching old festival videos or planning my next adventure.