More than half of university students receive no financial help from their parents – resulting in most having to take out loans to cover tuition and living expenses.
In a survey by website Topcashback.co.uk almost three quarters of students said they did not expect any help from parents. But a smaller number – 57 per cent – did not actually receive any.
The backdrop is steeply rising university costs and the introduction of a complex and controversial new student loans system, which launched in 2012. From that year annual university fees in England rose from up to £3,000 to up to £9,000.
The site’s research shows two-thirds of students take out student loans to help cover the cost of university and 54pc have a job while studying. Smaller numbers – two in five – use savings to help meet the costs.
As Telegraph.co.uk has reported the new loans system – effective from September 1, 2012 – is complex. All students in England can apply for tuition loans, covering their course fees, and maintenance loans that help with living costs such as accommodation, bills and books.
Full-time students can borrow up to £9,000 a year for tuition fees and up to £7,675 a year for maintenance costs.
The rate of repayment is linked to earnings. Graduates must start making payments only once their salary reaches the threshold of £21,000 a year (before tax or National Insurance). The monthly repayments are 9pc of income over £21,000, so the more you earn the more quickly you pay it back. Interest on the borrowing is calculated separately. It starts accumulating while you are studying at a rate of RPI inflation plus 3pc. That changes once students graduate and begin earning a wage. At that point the interest rate is calculated according to income on a sliding scale where higher earners pay a higher rate.
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