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Student Fees in 2012

| November 7, 2011 | 0 Comments

If you’re starting university this autumn, you will be aware that you are amongst the last of the lucky freshers to pay £3,000/year for tuition. But what if you looking to apply in 2012? How will the increased fees hit your pocket?

With the majority of universities attempting to charge the full £9,000 a year, it is important to understand the full cost of university, now more than ever.

Understanding how fees work

When you enroll at university, unless you are paying your fees upfront, the government pays for the cost of your tuition. This is true whether at a university charging £6,000 or the full £9,000.

After graduation, when you start a job earning over £21,000 a year, you begin to pay back your fees to the government loans company. This £21,000 a year threshold is an increase over the existing £15,000. Therefore, from 2012, you will have to be earning more money before you begin to repay your loan.

After you start earning £21,000 a year, you will repay up to 9% of your salary above the threshold. The repayment percentages are incremental starting at 3%.

After 30 years, your debt is cleared.

 

How much will you pay back?

Despite the increased fees, the government has predicted that the 25% lowest-earning graduates will be significantly better off with the new system, than the old.

In a paper published by the Institute for Fiscal Studies, it found that most graduates will not pay off the entirety of their loan in the 30 year period.

 

So which is better?

The new system can be more costly to the most successful graduates. Ultimately though, you will be paying less back at a slower rate, under the 2012 system, than you will under this year’s system.

So, who are the lucky freshers now?

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Category: Articles & Advice

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