Concerns about money?

Concerns about money, affordability, fees and student loans can be a barrier to parents and carers, as well as teenagers, when you’re helping them make the decision to go to university.

So it’s important to understand the facts about tuition fees, loans, and repayments.

EIGHT quick facts about how university degree finance works

1. Your teenager will need to pay for their tuition fees. Tuition fees are up to £9,250 per year BUT your teenager does NOT have to pay anything up-front.

2. Everyone is entitled to a student loan to cover their fees and a maintenance loan to cover living costs – which are then repaid later (see 3).

3. They will not have to repay their loan until they are earning in excess of £25,000 (accurate at the time of publication) the amount they pay is based on 9% of what they earn over the threshold, NOT what they owe.

4. Let’s take an example, for a graduate earning £30,000 a year, they will pay 9% of £5,000 annually (that’s £37.50 per month). So, the repayments could be smaller than you think.

5. Your teenager could think about the loan as an investment in their future, so less of a debt and more of a graduate tax, and a good investment for an excellent career ahead, with the potential to earn more money.

6. If their earnings stop, their repayments stop – and if they have not repaid the full amount after 40 years, the debt will be cancelled.

7. Interest is charged immediately from the day their first payment is made either to them, or their university or college, until the loan is repaid or cancelled, but won’t affect how much they repay each month.

8. It’s also important to know that the repayment amount is flexible; if your teenager’s income drops, so does the repayment amount.

FIVE quick facts about how degree apprenticeships finance works

1. There are no fees to pay, because the employer is responsible for funding the costs of the degree aspect of a degree apprenticeship.

2. Many degree apprenticeship employers pay much more than this amount. As well as having their degree paid for, degree apprentices receive a salary, often competitive and determined by each individual employer.

3. For example, a software engineer apprentice can earn £14,400 per year, an accountancy apprentice can earn around £15,000 per year, an aerospace engineer apprentice at BAE Systems UK can earn £25,748 per year.

4. Apprentices are entitled to the same rights as other employees, including having a contract of employment and at least 20 days paid holiday a year, plus bank holidays.

5. Some employers offer other benefits such as a pension, access to a car and leisure facilities, and time off for study, training and lectures.

Further reading

Please also read our basic guide to student finance in which we spell out more facts and wage comparisons in full, so you have all you need when discussing the issues with your teenager.