Student Loans Guide for Parents

Should you help your child with the cost of university, or should they take the full loan? 

What is the guide?

A common objective for wealthy parents is to help their children fund a university education but, at a cost of £9,250 per annum before you’ve even bought a single textbook, Pot Noodle or any accommodation, the cost is far from trivial.

As a parent, before you decide whether to help your child, please download and read our free guide on student loans.

This guide will help you to make an informed decision as to what to do when it comes to helping your child with paying for their education.

The guide also cover some questions that your child may be wondering such as:
  • How are the repayments calculated?
  • What if they have low earnings?
  • What might happen if they can’t afford the repayments?
  • What if the interest rates go up?
The deadline to apply for student finance for the 2023-24 academic year is 19 May 2023 for new students and 23 June 2023 for returning students.
This guide takes into consideration the recent announcements made by the UK government:

The UK government has announced a new student loan system, which will be introduced for students starting university in 2023. The new system, known as Plan 5, will have a number of changes from the current system.

One of the biggest changes is that students will now start repaying their loan when they earn over £25,000 per year. This is a significant increase from the current threshold of £27,295 per year.

Another change is that the interest rate charged on student loans will be linked to the Retail Prices Index (RPI). This means that the interest rate will rise and fall in line with inflation. This is likely to mean that the interest rate on student loans will be lower than it is currently.

Finally, the new system will also have a longer repayment period. Students will now have 40 years to repay their loan, instead of the current 30 years.