Ten student finance myths busted

If you’ve got your heart set on going to uni, funding can open the doors

Student money site Save the Student unpicks some common myths about getting, keeping and mastering student finance.


Myth #1 You have to be rich to go to university

Getting a degree isn’t cheap – but the more useful question is ‘is it affordable’? If you’re eligible, the student loan means you won’t pay back tuition fees and some living costs until well after graduation.

There’s also other funding that doesn’t have to be paid back at all. If you want a degree, think of Student Finance as your starter pack: it’s enough to cover the basics but, to be more comfortable, you may need a bit extra on the side.

Myth #2 You have to pay back any financial support you get

Not always. Like it says on the tin, the student loan (tuition fees and maintenance loan for living costs) is repayable. There are also non-repayable pots of Student Finance, including for students with disabilities, with kids, or who have to travel for placements or study abroad. Your uni may offer bursaries, scholarships and hardship funds, too.

It’s worth remembering these funds are often limited, and you may have to repay them if you drop out from your course: search early, and read the small print!

Myth #3 Your finances at uni have nothing to do with your folks

The government does loan out maintenance money for living costs, but this is also tied in to how much your parents earn. In fact, parents are expected to chip in too.

Either way, talk to your family about how much they can afford to give you, and have a back-up plan if necessary.

Myth #4 Student finance = easy street

The maintenance loan can be a decent wad of cash but, frankly, it doesn’t always keep pace with reality - rent alone can cost way more than you can borrow!

Make a budget, allocate your cash, and try to get a feel for the tight spots – and how you’ll handle them – before they land. It’s especially easy to zip through your loan as soon as it lands, making the rest of term skint city. Do yourself a favour and find ways to make your cash go the distance.

Myth #5 It’s game over if maintenance money falls short

Here’s where a budget helps – it’ll give you time to get back-up cash in place before you need it.

If savings, wages, family top-ups and your 0% overdraft aren’t enough to plug the gaps, check you’ve got all the student finance and uni support you’re entitled to. There may be charity grants, or council and corporate schemes you can apply for as well.

Definitely talk to your uni’s welfare team before things get desperate – they’ll know of other schemes worth scoping out.

Myth #6 It’s cheaper to pay tuition upfront

The student loan is worth considering whether you can make it through uni on your own dime or not. In fact, paying upfront or clearing your loan early could mean spending more than you need to.

If you’re not eligible for student finance, or it’s not enough, you’ll need back-up: find free funds (savings, wages and academic awards) ahead of commercial borrowing to keep costs – and stress – to a minimum.

Myth #7 Repaying the student loan is expensive

You don’t start repaying your student loan until you’ve left your course AND your income is more than £21k in England/Wales (£17,775 in Scotland/NI).

You then pay 9% of whatever you earn above the threshold. So earn £22,000 in England, and you’ll pay 9% of £1,000 – that’s around £7/month.

You can expect to make higher monthly payments as your earnings go up (i.e., with raises or bonuses), but always capped to 9% above the threshold.

Myth #8 You’ll struggle to repay the loan if you don’t get a job

Repayments are taken automatically from monthly wages before you’re paid, and flex with your earnings.

If you don’t earn more than the threshold - if you’re unemployed or work fewer shifts one month - repayments pause until you’re back over the limit. If you’re self-employed or work abroad, you’ll be responsible for making payments yourself – but again, you won’t pay if you don’t earn enough.

Important: at no point will your folks be asked to cough up on your behalf!

Myth #9: Interest rates will bleed you dry

While interest rates are king when it comes to inflating how much you owe on your student loan, they won’t affect how much you pay each month. Even if interest rates go through the roof, repayments stay capped to earnings.

Myth #10 You’ll be paying off the loan for the rest of your life

Unlike commercial loans, student loan repayments come with a time limit.

You’ll make repayments either until you’ve cleared the whole amount or for 30 years, whichever comes first. Because repayments flex with your income, there may also be some months you don’t make payments at all. Currently, around two-thirds of students are expected to hit loan wipe out – meaning they’ll never repay the whole lot before it times out!

What’s available and how much you get from Student Finance varies around the UK and usually which country you live in.  This is a universal overview, so remember to check things out for yourself!

Do you have any questions about student finance?

If you've been through it before, what tips would you give to those applying for finance? Join in with the discussion below.

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