How dropping out will affect your finances

Think about your finance!

University is proving harder than you thought, or perhaps circumstances just aren't right for you; and so you've decided that dropping out is your only option - or you may be in the process of making that decision. But before you go through with anything, have you stopped to think about how dropping out will affect your finances?

Given that you're at university, you may well...
  • Have taken out a loan with the Student Loan Company (SLC)
  • Have received maintenance funds from your Local Education Authority (LEA)
  • Have received further maintenance funds from the university you attend.
  • Have signed a contract with your university halls or an independent landlord.

How will dropping out affect my funds received?

Funding from the SLC 
Any loans that you will have received from the SLC will be collected when you are earning over £15,000 per year as with any student who graduates. However; any overlap between the amount paid and what you are actually entitled to can be demanded at any time. This will be in the SLC's terms and conditions.

Funding from the LEA 
The funding you receive from your LEA you are only entitled to while you are still attending your lectures and seminars. If you stop attending university for a period before you drop out, then you will be required to pay back all funds you are not entitled to have received, based on the date you last attended. Entitlement to funds runs from September 1st to August 31st each year (except for final years where the end date is the date you officially finish). The LEA can request both maintenance loans and grants back straight away, so make sure you don't overspend!

Work out how much you have to pay back 
To work out how much of the maintenance grant you need to pay back, do the following maths:

  • Work out the number of days between September 1st until and the last date you attended.
  • Multiply this number of days by the amount of funding you are entitled to.
  • Divide this number by 365 (or 366 in a leap year).
  • The figure you are left with is how much money you are entitled to keep; the rest must be paid back.


  • You're entitled to £2700 maintenance funds from the LEA.
  • Say you stop attending on the 11th November. That's (if my maths is correct) 72 days.
  • 72 multiplied by £2700 = 194400
  • 194400 divided by 365 = £532.60
  • £2700 minus £532.60 = £2167.40

In this example you would be entitled to keep £532.60, meaning you'd have to pay back £2167.40.

The amount of maintenance loan you will be asked to pay back immediately is calculated in broadly similar way but uses the term dates for your course and so will vary from the calculation used above

Funds from the university

In addition to finances from the SLC and the LEA, many students are entitled to a bursary from the university. The minimum bursary amount from someone receiving the full maintenance loan is £319, but this is substantially higher for those who receive larger amounts of non-repayable government finance. In the case of dropping out from university, you may be required to pay some or all of this back, and this is likely to depend on the university you attend. As a rule of thumb, funds for completed terms are likely to be wavered, but funds for terms in progress are viable to be requested back.

How dropping out will affect fees payable?

Course Fees 
Since these are usually covered by the SLC, these will usually be repayable, as with those who complete their terms in university, when you are earning over £15,000 per year. However, be aware that entitlement to tuition fee loans stipulates that students must be in attendance of the course three months after the academic year starts (1st of September for most courses; 1st of January for courses that start in the new year; 1st April for courses starting from April onwards). If you drop out before this three month cut off period, the university my charge you for the time you attended, but because you do not fulfill the entitlement for the funds, you will have to pay this out of your own pocket, as the SLC will get their funds back from the university.

Accommodation Fees 
When you move into accommodation, either with the university or with a private landlord, you will have signed a contract. At most halls of residence, signing this contract means you agree to pay the accommodation fees for the entire year, and so you will still be required to pay this when you leave. With private landlords, there is likely to be some more leniency in that, if you can find someone to take over your room for the duration of the rest of the contract, then you won't have to pay any more than to cover the length of time you occupied the room. Always read the small print in contracts with private landlords thoroughly.

How will this affect my future student finance applications?

You must also bear in mind that any student finance you have received already will affect the finance you can receive for future years of study. No matter when you drop out of your course, be it after two weeks or two weeks short of the end of the year, it counts as an entire year in terms of funding entitlement. The amount of future funds you are eligible to receive is worked out by a simple mathematical process.

Work our how much more funding you are entitled to 
In order to work out how much funding you are entitled to, follow this simple process.

  • Work out how many years your next course lasts.
  • Add one.
  • Subtract from this the number of years you have already received funding for.
  • The number you are left with is how many years worth of funding you are eligible to receive.


Number of years of next course = A. Length of time already in study (years) = B. Number of years worth of funding you are entitled to = C.

(A+1) - B = C.


  • You intend to start a course in 2010 that last for 3 years.
  • 3 plus one = 4 (Nice and simple)
  • You previously studied at university to your second year before dropping out, this means you have received finance for two years.
  • 4 minus 2 = 2 (Again, nice simple maths)
  • This means you are eligble to receive two years` worth of finances.
  • Because entitlement is worked from third year backwards, this would mean you'd have to fund your first year for yourself.
  • You previously studied one year of a four year course, but you dropped out, and you now intend to start a new four year course.
  • 4 plus 1 minus 1 = 4
  • This means you are entitled to receive four years worth of finances, which will cover the whole of your new course



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