Student loans were introduced by the government so that everyone in the UK could have the right to a university education. The result was that more people were going to University and more people were able to survive whilst they were at that university. With student fees increasing annually, and university places becoming more competitive, along with slimmer chances of immediate employment upon graduation, many students are now asking themselves: is student loan right for me?
Student loans are right for you if there really is no other way for you to attend university. Nine thousand pounds a year of tuition fees on average, plus living costs plus accommodation is a big ask for most families and in these cases, a student loan is a good way to finance your educational journey without the agony of more real loan types which require significant interest and have strict acceptance policies before they will lend. Student loans are not like any other loans, as loan repayments are automatically deducted from your paycheck when you start earning over a certain amount. Student loans are also not counted as real debt when it comes to buying a home or taking out any other kind of loan. What this means is that if you do want to attend university, your family does not have the means to pay tuition fees for you and you would rather not work whilst you are at university then yes, a student loan is a good way to enable you to have a university education and definitely an option you should consider.
If on the other hand you do not need funding from a source outside of your family, then it may be that a student loan is not really necessary for you. If your family (or you) is able to pay your university tuition fees for you, then going without a student loan will stand you in a better financial stead when you graduate, as you will have no debt to pay. Better still, if you are able to work and earn whilst you study, then there is not really any need to get yourself into debt just because you can. There are also those who are only studying for one or two years, such as for a masters degree program or other post graduate qualification, in which case it should be easy for you to save up enough money to study.
Another option for those who are in two minds about whether to apply for a loan or not are those eligible for funding or scholarships. This group of people is those who have particular talents, come from a particular socio economic background, or have won a place on a scheme that will pay for your tuition. If this sounds like you, then rather than go straight for the loan system, it would be well worth looking into grants and other forms of funding or employment in which someone else picks up the bill for your studies. If you are already working, this could be done through your existing employer as most good work places will have a staff development program, or if you are not working, you can look for jobs in which development is part of what they offer: including training and studying and other related costs.
Ben writes for Oracle Finance, an expert financial services company based in Guernsey.
Image credit: CollegeDegrees360 (flickr)