UPDATE AUG 2010: This guide is currently being updated with the new interest rate change and details for 2010/11. The latest information will be published in the weekly email soon. See the End to interest free loans MSE News story.
Students have to borrow, it’s as simple as that; yet it’s not debt you should worry about, but bad debt. No one in the UK should be put off studying because of student debt – do it right and it shouldn’t be a problem.
This guide has been produced in co-operation with the Department for Business, Innovation and Skills, and should help show parents how student finance works, and how to get your kids into higher education with less of a burden.
Who is this for?
This guide's for any parents who are sending their son or daughter to university, or may be doing so in the next few years. The PDF explains what you and your child need to know about funding university, from the student support package through to student bank accounts and part-time jobs.
Why this guide?
It's important that no one should be put off studying because of worries about money or debts, and this guide will show you there’s no need to be discouraged. The Students' Guide To Student Finance is constantly updated to help everyone entering higher education, and MoneySavingExpert.com has relinquished its copyright on it, if any parents, teachers or student unions want to distribute it.
Plaudits to the Department for Business, Innovation and Skills for spotting the students' guide, and together we’ve worked on this guide for parents.
Important note: The 2009/10 student loan interest rate
This PDF was updated before the announcement that the student loan interest between 1 September 2009 and 31 August 2010 will not track March 2009's inflation rate, because the Government's invoked a clause allowing it NOT to charge interest. So the rate will be 0%.
This may sound good but it makes borrowing more expensive than if the rate followed inflation. By following inflation it would have been MINUS 0.4%, meaning loans would decrease in size.
Although we're talking about a fraction of a percentage point,
this does go against the idea that loans will have no 'real' cost to them. That said, it still is the cheapest form of borrowing available and you shouldn't let this put you off higher education in the slightest. The basic logic of student finance in this guide remains unchanged.
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