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How much does university cost, and is it worth it? Student finance: How much does university cost and does it increase earnings?
(5 months later)
Thousands of students will have received their A-Level results this summer. However, with the cost of living rising, many may be wondering whether going to university is worth the price. Students starting university in England this year face big changes to the way student loans work.
Here's a look at the financial pros and cons. Coming alongside the cost of living crisis, some are wondering whether university makes financial sense.
What does it cost to go to university? What does going to university cost?
Most student debt comes from tuition fees, which most people pay by taking out a student loan. The combined cost of tuition fees and accommodation for an undergraduate UK student varies:
The maximum annual fee can differ substantially depending on where you live at the time of applying for a course: England: £49,887
Wales: £45,494
Northern Ireland: £32,091
Scotland: £27,775
These estimates use data from the National Union of Students (NUS) and the Unipol housing charity. They assume students pay the maximum fees in the nation where they already live, spend one year living in university halls and other years in private accommodation. The figure for England includes London averages.
Students also need to budget for other big expenses which are not included - food, transport, course materials and going out.
How much are tuition fees?
The cost of tuition also varies:
England: £9,250England: £9,250
Wales: £9,000Wales: £9,000
Northern Ireland: £4,630 for Northern Irish students, and £9,250 for other UK students Northern Ireland: £4,710 for Northern Irish students, or £9,250 for other UK students
Scotland: Free for most Scottish students - as long as they meet the criteria for government funding - and £9,250 for other UK students Scotland: Free for the majority of Scottish students, and £9,250 for other UK students
Although tuition is usually free in Scotland, there is a cap on the number of university places, so there's less opportunity to study. What does student accommodation cost?
Then there are accommodation costs. If you are leaving home, it is generally cheaper to live in university-owned accommodation. If you are leaving home to study, it is generally cheaper to live in university-owned accommodation.
In 2021-22, the average rent for university-owned rooms was £6,227 per year, while for private rooms this was £7,732, according to student housing charity Unipol. In 2021-22 (the latest figures available) average rent for university-owned rooms was £6,227 per year, and £7,732 for private rooms.
Unipol estimates the average rent for a room in London consumes 88% of the maximum maintenance loan - the loan for living costs - available for students in England. There are big differences between areas.
For students in England studying away from home outside of London, it estimates accommodation costs in England account for 72% of the maximum maintenance loan. That leaves students with £69.52 a week to spend on other living costs, it says. In London, the average cost for university-owned rooms was £7,546 per year and £12,034 for private rooms.
In general, students who choose to study away from home are likely to face higher costs, according to the Sutton Trust. Its 2018 research found students from lower income families are more than three times more likely to commute to university from home than students from wealthier backgrounds. That might save money on rent but will mean higher transport costs. In England overall, it was £6,471 a year for university-owned rooms and £7,833 for private accommodation.
So for an average degree student in England who pays the maximum tuition fees and chooses to stay in university rooms for their first year before switching to private accommodation, three years of study will mean a cost of £49,441, based on those current figures. But that is before the other extra costs of student life are added on. Scotland was £5,809 for university accommodation and £7,322 for private.
Those other costs to consider include: For Wales it's £5,106 and £6,694, and for Northern Ireland it's £4,565 and £6,698.
Food
Going out
Transport
Course materials
How do student loans work?How do student loans work?
The typical student loan is made up of two elements: Most UK students take out student loans.
Eligibility and repayment rules differ across the UK, but student loans are typically made up of two elements:
loan for the tuition fees - paid directly to the universityloan for the tuition fees - paid directly to the university
maintenance loan - paid into the student's bank account in instalmentsmaintenance loan - paid into the student's bank account in instalments
Most people are entitled to the tuition fee element, which is equal to the annual cost of your course up to £9,250 per year.
The maintenance loan is intended to cover accommodation, food, books and equipment.
The amount you get depends on your family's household income. If your parents earn above a certain amount they will be asked to contribute to your living costs.
You might get extra money if you are disabled or have children.
If you're under 25 and have no contact with your parents, you might be able to apply as an "estranged student" which means their finances are not considered.
Students in England can borrow up to £9,978 a year for a maintenance loan if living outside London and away from their parents. This increases to £13,022 in London.
In Scotland, the maximum annual maintenance loan is £8,000. In Wales it is £10,720, and in Northern Ireland the maximum loan is £6,776.
Students are charged interest on their total loan from the day they take it out.Students are charged interest on their total loan from the day they take it out.
Once they have graduated and start earning a certain amount of money, their loans are repaid through the tax system. Student finance for undergraduates
Eligibility for loans and repayment rules differ in England, Scotland, Northern Ireland and Wales. Student finance calculator
If you live in England and you start university this September, any outstanding debt will be written off completely after 30 years. This will rise to 40 years for those who start their course in 2023. How are student loan repayments changing in England?
Everything you need to know about student loans If you live in England and are starting university in September 2023, you will pay back 9% of your earnings over £25,000 from the April after you graduate. This is lower than the current threshold of £27,295.
What you need to know about this year's A-level results You will also have to pay the loan back for longer.
Crisis cash for students doubled last year Under "Repayment plan 5", any outstanding debt will be written off after 40 years, instead of 30.
What financial help is available? However, the amount of interest charged is being cut. New students will be charged interest equal to the retail price index (RPI) measure of inflation, instead of the current rate of RPI plus 3%. (The current RPI rate is 10.7%).
Full-time undergraduates in Wales are entitled to maintenance grants of at least £1,000 - and up to £10,124 for students from the poorest backgrounds studying in London. The government says this means new students "will not repay more than they originally borrowed over the lifetime of their loans, when adjusted for inflation".
For all students, they may be able to get financial assistance from the university itself, or charitable groups, in the form of bursaries, grants, allowances or scholarships. But Martin Lewis, founder of MoneySavingExpert.com, says extending the period over which university leavers pay back their loans will increase "costs by thousands" for lower and mid earners, who are unlikely to completely repay their loan.
Students experiencing financial difficulty can also apply for hardship funding, which does not usually have to be repaid. Labour also said the changes will "hit those on low incomes hardest".
Will I earn enough money to make it worth it? What extra financial help is available?
In general, most graduates can expect to earn more than non-graduates, according to the Higher Education Statistics Agency. Eligible students in Wales and Northern Ireland can also claim maintenance grants which are not repaid.
However, it also suggests that the "graduate premium" - the comparatively higher earnings of university graduates - has reduced over time. Full-time undergraduates normally resident in Wales are entitled to at least £1,000. There is up to £10,124 for students from the poorest backgrounds in Wales who study in London.
The subject taken and university attended can influence how much graduates can earn. Salaries can also vary between men and women and between people from wealthier and poorer backgrounds. In Northern Ireland the maximum maintenance grant is £3,475.
Research by the Institute for Fiscal Studies carried out in England suggests on average, women who studied creative arts and languages degrees earned the same amount of money in their lifetime than they would have had they not gone to university. The Scottish government offers financial support to certain categories of students, such as those with dependants.
Women who studied law, economics or medicine earned more than £250,000 more than they would have done had they not gone. Across the UK, students in financial difficulty can apply for hardship funding from their institution, which does not usually have to be repaid.
Men who studied creative arts on average earned less across their lifetimes than if they had not attended university, but male medicine or economics graduates earned £500,000 more in their lifetime than they would have done if they had not gone. They may also be entitled to financial assistance from charities.
Attending university can help students from poorer backgrounds earn more than their parents might have done, according to research carried out by the Sutton Trust in England. Will I earn more money?
But there are still differences. The same research suggested a fifth of graduates who were eligible for free school meals achieved earnings in the top 20% of the population - compared to just under half of graduates who attended private schools. Most students will leave university owing money. The average debt for students who start university in England this year, for example, will be about £43,000.
This may be for a variety of reasons beyond university choice and subject, though. Graduates from wealthier backgrounds may have more access to information about well-paid jobs, for example. In general, most graduates can expect to earn more than non-graduates, according to the Higher Education Statistics Agency (HESA).
The government in England says universities should provide value for money. It has announced plans to limit the number of university places to tackle "pockets of some poor quality". However, it suggests the extra money earned as a result of a university education has reduced over time.
Finances are a key consideration when weighing up whether or not to go to university. But it's also important to consider the other things going to university can offer, such as developing new skills, mixing with new people and experiencing new places. According to data from HESA's survey of 2020-21 graduates, the average salary reported 15 months after gaining a degree was £27,340.
Additional reporting by Sarah Habershon and Hannah Cox.  Poor quality university courses face student limits
How much graduates earn also depends on the subject studied and university attended.
Research by the IFS think tank in England suggests, on average, women who studied creative arts and languages degrees earned the same amount in their lifetime as if they had not gone to university.
Women who studied law, economics or medicine earned more than £250,000 more during their career than if they had not got a degree.
Men who studied creative arts on average earned less across their lifetimes than if they had not attended university. Male medicine or economics graduates earned £500,000 more.
Attending university can help students from poorer backgrounds earn more than their parents might have done, according to research by the Sutton Trust in England.
But only a fifth of graduates who were eligible for free school meals went on to be in the top 20% of earners - compared to almost half of graduates who attended private schools.
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