Government-backed postgraduate loans for masters students
Students taking a masters from 1 August 2016 will be able to borrow up to £10,000 towards overall courses costs (including tuition fees, accommodation and living costs).
- Loans of up to £10,000 will be administered by the Student Loans Company (SLC)
- For taught, research or professional masters in any subject (full-time, part-time or via distance learning)
- Eligible for courses offered by higher education institutions in England, Scotland, Wales and Northern Ireland with their own degree awarding powers
- Open to eligible students up to 60 years old
- Loans will not be means-tested
- Open to eligible students resident in England or the EU [the rules are unchanged by the referendum result]
- Repayment is income contingent (repayments at 6% above the £21,000 annual income threshold) and concurrent with undergraduate loans
- Online applications can now be made at gov.uk/postgraduate-loan.
The changes promise to open postgraduate study up to thousands of students who otherwise wouldn’t be able to fund a masters place.
Will I be eligible?
The loans are designed to help students make the transition to postgraduate study for the first time. If you already have a masters or PhD qualification then you won’t be eligible for a postgraduate masters loan.
You’ll need to be aged 60 or under to be eligible and your financial circumstances will not have a bearing on your eligibility; the loans will not be means-tested.
To satisfy the residency criteria, applicants will need to have been resident in England for three years or more on the first day of the course (or to satisfy the loan eligibility criteria for EU nationals).
Postgraduate education is a devolved matter in the UK so students who usually reside in Scotland, Wales or Northern Ireland will not be eligible BUT there is a recommendation for the devolved administrations to consider similar schemes. As soon as we know more we’ll update the details here.
Has the referendum changed eligibility criteria?
The eligibility rules for students from the EU are unchanged by the referendum result. Masters loans are still available to eligible EU students.
Jo Johnson, minister of state for universities and science, has also confirmed that current EU students and this autumn's applicants will continue to receive student finance for duration of their course.
Is my course eligible?
Taught, research or professional courses in any subject that lead to a masters qualification at Level 7 (150–180 credits at Level 7) are eligible. For example, an MA, MSc, MRes, MBA, MEd or LLM would qualify. As a guide, a 12-month masters course is normally 180 credits (a PgCert is 60 credits and a PgDip 120 credits).
Courses eligible for the loans will last between 1–2 years full-time. If you are planning to study part time, you’ll need to study at 50% of the intensity of the full-time course to be eligible (for example a two year full-time course would take four years part time).
Initially, the course must be offered on campus or via distance learning by an institution with degree-awarding powers in the UK (this is important to check given that some institutions partner with other universities who validate their courses). This will be reassessed for the 2017/18 academic year.
Budget 2016 update on part time courses
The chancellor confirmed in the budget that course eligibility will be extended to include three-year part-time courses with no full-time equivalent. Find out more about the updates.
How will I get the money?
The Student Loans Company will administer the postgraduate loans for students in England. Payments are made directly to students using much of the same apparatus as the undergraduate loans. An application form will be available from GOV.UK in the summer.
The payment will be made in three instalments across the academic year, once the university has confirmed that you’ve enrolled and that you’re attending/participating. If your course will last longer than two years, you'll receive all your installments on the loan in the first two years (the SLC only makes payments in the first two academic years).
If you drop out, the university will inform the SLC that you’re no longer in attendance and you won’t get any remaining payments but you will still have to repay what you’ve borrowed.
What about repayments?
- Interest starts accruing from the payment of the first loan instalment.
- Interest is currently set at RPI plus 3%.
- Payment will only begin once the borrower earns £21,000 or more a year.
- Loan repayments will be at 6% of income above the £21,000 income threshold (and repayable concurrently with undergrad loans).
- Repayments will begin the April after the course finishes (provided the income threshold has been met) EXCEPT for students borrowing in 2016.
- Students borrowing in 2016 will not need to start repayments until April 2019 (although they can make voluntary payments before then).
- The £21,000 threshold is frozen until 2021.
Loans for students of all ages
The original proposal announced in autumn 2014, was for means-tested loans for taught masters courses, for students under 30. The consultation that took place earlier in the year resulted in a number of key changes to the original proposal, including the removal of the age cap at 30, means testing, and extending the remit of the loans so that taught, research and professional courses are eligible. Good news for everyone.
Student loans for doctoral students
The loan scheme for doctoral students is still in the consultation phase with more information expected in the coming months. The proposal is for income-contingent loans of up to £25,000 to work in addition to grant funding (not to replace grant funding).
Read more on the confirmation of doctoral loans in the March 2016 budget.
Where can I find out more?
Read the government’s response to the consultation on postgraduate loans and the suggestions being made for doctoral loans at www.gov.uk.