Supporting your child's student finance: Q&A
Got a question about your child's student finance application? Julie Kelly from the University of Hertfordshire tackles some important need-to-knows...
Now it's over to Julie to dispel some myths and tackle the big questions about your child's student finance:
- Do I have to give proof of my household income?
- What do I need to provide for my child's application?
- I'm a divorced parent. How does this affect my child's finance application?
- I/my partner receives disability benefits. Will this affect my child's finance application?
- If our financial circumstances change while my child is at uni, will this affect what they receive?
- If my child doesn't receive enough in loans to support themselves at university, what are our options?
- If I have more than one child at uni at the same time, does this affect what they'll each receive?
- If my child leaves their course early or changes to another university, what happens to their student loans?
- Should I help my child repay their student loans earlier?
Does my child's student loan affect their credit rating?
Do I have to give proof of my household income?You don't have to. The tuition fee loan is non-income assessed, and so is part of the maintenance loan. You only need to provide details of your household income if your child wishes to apply for the maximum amount of maintenance loan available to them.
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What do I need to provide for my child's application?
This depends on your circumstances, your income and the number of child dependants you have. If you need to provide proof of earnings, this could take the form of your P60 or Self-Assessment tax return, and your National Insurance number.
You will also have to give evidence of any taxable state benefits, pensions or any income from UK and foreign investments.
I'm a divorced parent. How does this affect my child's finance application?If your child does apply for income-assessed support, they will be asked to give the financial details of the parent that they 'normally live with'.
If that parent is married, in a civil partnership, or living with a partner, that partner will also need to provide their details.
Any tax-free state benefits such as Disability Living Allowance are not counted as household income, so this shouldn't affect what your child receives.
I/my partner receives disability benefits. Will this affect my child's finance application?
Your child's entitlement is based on household income for the previous tax year. So, an application for finance for September 2017 will look at your income for the tax year 2015/16.
If our financial circumstances change while my child is at uni, will this affect what they receive?
However, if your household income is at least 15% less than it was in the previous tax year, you can apply for a Current Year Income Assessment. This will review your expected income for the present tax year.
With accommodation, course and living costs to manage, your son or daughter might well find that their maintenance loan alone won't be enough to cover these - and it might be down to you to help make up the shortfall, particularly given that the level of maintenance loan your child receives will be based on your income. You can find out more about how much you might be expected to pay in this finance guest blog from MoneySavingExpert's Martin Lewis.
If my child doesn't receive enough in loans to support themselves at university, what are our options?
Of course, your child can also boost their income and support themselves by finding part-time or holiday work. It's also worth checking to see what financial support their university can offer by way of bursaries, scholarships, and hardship funds.
If I have more than one child at uni at the same time, does this affect what they'll each receive?In England, for each additional dependant child in higher education, Student Finance England will deduct £1,130 from the total household income they base their assessment on.
For example, a family with a household income of £58,000 and two dependant children at university, will be considered to have a household income of £56,870. This reduction could push you into a lower household income bracket, meaning your children could receive a bigger maintenance loan.
If your son or daughter isn't applying to Student Finance England for their finance, check how your funding agency handles such a scenario.
Any changes to course, mode of study, university or any repeat years will affect your child's funding allowance. It's vital they seek proper advice before making any major decisions or changes, and to get this advice in writing.
If my child leaves their course early or changes to another university, what happens to their student finance entitlement?
If your child changes university or course, the amount of funding they receive could change depending on whether or not they study in London, and the number of weeks the course runs for.
If they leave one university and start at another, they could also be put on to a new support package if the package has changed.
It's a complicated issue. We recommend they speak to a student finance adviser at their current university, or contact their student finance agency for more advice.
Loans gain interest from the day they are issued until the day they are paid or written off (currently after 30 years). Once your child has left university, the loan will gather interest depending on how much your child earns.
Should I help my child repay their loans earlier?
If you have the funds available and wish to cut down the interest the loans are accruing, then you may wish to make a contribution. However, it's worth considering if your child will likely pay off the full amount before the write-off period - understandably, this is difficult to predict.
In this case, if you pay off more of their debt sooner, you may end up paying more back than you actually need to.
Your child's student loan will not affect their credit rating, and won't show up on a credit report either.
Does my child's student loan affect their credit rating?
When your child applies for a mortgage, their loan repayments may be taken into consideration in terms of calculating their net income.