Graduate loans
Master’s courses in the UK can be costly, but the UK Government offers a graduate loan of up to £11,222 to help fund your studies. This guide covers the UK Government’s graduate loan, how to apply, eligibility, and repayment.
In This Guide:
- What is the Graduate Loan?
- Loan Eligibility
- Applying for a Graduate Loan
- Loan Repayment
- Alternative Loan Options
- Conclusion
What is the Graduate Loan?
The UK Government provides loans for postgraduate students pursuing a Master’s degree at a UK university. These loans are designed to help cover expenses associated with living costs while pursuing further education.
Loan Usage
Funds can be used for various expenses, including tuition fees, living costs, and course materials. Students have flexibility in how they use the loan to best support their education.
Master’s Degree Costs
Master’s degrees cost between £5,000 and £30,000, with an average of £11,000. The loan may not fully cover tuition fees, so students may need additional funding to repay it.
Difference from Undergraduate Loans
The Postgraduate Loan is not means-tested, meaning parental income does not affect the amount received per graduate loan. This differs from undergraduate loans, which take household income into account.
Loan Disbursement
The loan is paid in three instalments throughout the course, the same way as undergraduate loans, ensuring students receive financial support throughout the course of their studies.
Part-Time Study Payments
Payments for part-time students are available only for the first two years. Students should plan their finances and academic year accordingly.
Increasing Loan Amount
If you borrow less than the maximum initially, you can increase it later. However, you must ensure the first payment of the total borrowed amount does not exceed the set loan limit.
Loan Utilisation Advice
Borrowing the full amount is recommended in some personal circumstances, with excess funds placed in a Student Savings Account to manage expenses efficiently.
Loan Eligibility
Applicants must meet certain requirements to qualify for the loan.
Basic Eligibility
- British or EU citizen residing in the UK for three years (EU citizens must be UK residents at course start).
- Under 60 years old at course start.
- UK resident for non-study purposes.
- First postgraduate degree (Master’s or equivalent, excluding PgDip/PGCE).
- Studying at a UK institution.
- No outstanding student loan repayments.
Special Cases
Exceptions may apply; check official eligibility criteria to confirm your status.
Eligible Courses
Loans apply only to full Master’s degrees. PgDip and PgCert programs do not qualify. Students should verify their course eligibility before applying.
Applying for a Graduate Loan
Applications can be approved and submitted immediately, even without a confirmed course placement. Early application is recommended to avoid processing delays.
Required Documents
Applicants need the following:
- Valid UK/EU passport
- Bank account details
- National Insurance number
- Course and provider details
Student Declaration Form Submission
Print, complete, sign, and return your student declaration form along with required documents promptly to avoid delays.
Loan Approval Confirmation
Student Finance England will send an entitlement letter stating loan amount and payment dates. Ensure all provided personal details and are correct to prevent delays in receiving funds.
Loan Repayment
Repayments function similarly to undergraduate loans, with automatic deductions based on income levels.
Salary-Based Repayments - Deductions occur automatically from your salary once you meet the repayment threshold.
Income Threshold - Repayments start when annual income exceeds £21,000. Monthly payments vary based on earnings.
Considered Income Source - Income includes wages, benefits, and interest. Students should be aware of all income sources affecting repayment obligations.
Repayment Start Date - Repayments begin the April after graduation, providing a grace period of one academic year, before payments start.
Credit Score Impact - This loan does not affect credit ratings, allowing graduates to take out other forms of credit without issue.
Interest Rates - the Interest rate that accrues from the first day of loan disbursement and is variable. Understanding interest rates can help students manage their repayment strategy.
Loan Write-Off Policy - Unpaid loan balances are written off after 30 years, ensuring long-term affordability for borrowers.
Potential Policy Changes - Government terms may change, but alterations are typically minimal. Stay informed about updates that could affect repayment terms.
Holding an Undergraduate Loan - Postgraduate Loan eligibility is unaffected by existing undergraduate loans. Borrowers can manage both loans concurrently.
Alternative Loan Options
If dissatisfied with Postgraduate Loan terms, use loan comparison tools to explore other providers. However, government loans typically offer the best terms due to their favorable repayment structure.
Private Loan Considerations - Private loans may have higher interest rates and less favorable repayment terms. Compare options carefully before committing.
Employer Sponsorship - Some employers offer tuition assistance or sponsorship for postgraduate studies. Check with your employer to see if financial support is available.
Scholarships and Grants - Look into scholarships and grants to supplement funding. These do not require repayment and can help reduce borrowing.
Conclusion
The UK Government's Postgraduate Loan scheme offers significant financial support for Master’s students. Understanding eligibility, application, repayment, and alternative options ensures effective financial planning. Prospective students should explore all available funding sources to maximise support and reduce financial strain.
