What's a National Insurance Number & why do Student Finance need it?

In order to be eligible to various benefits provided by the government most workers in the UK have to pay National Insurance Contributions. Eligibility to some of these benefit can depend on the level of a persons contribution record. So even if they are not working (through choice, unemployment or sickness) it may be important to keep paying National Insurance Contributions. 

People are issued with a National Insurance Number and this will be used throughout life - by employers paying your contributions;when applying for welfare benefits or pensions; for some personal  financial matters; when registering to vote etc. Many people in the past will have been issued with a plastic card (like a credit card) with their number on. More recently a letter has been issued with the number on instead of the card.

To find out more about

• National Insurance 
• How to apply for a National Insurance Number (NINO) if you have not got one or 
• How to be reminded of a previously issued number

then follow this link to www.gov.uk

Q: So why do Student Finance need your National Insurance N
umber and refuse to release your student loans if you do not provide one?

A: Because they need it in order to arrange your loan repayments

When repayment of the student loans became dependent on a student's earnings after they have left their course, the government needed to devise a method of recovering the loans from students income. So as not to reinvent the wheel, the already existing system and process of taking money from employees income used for collecting income tax by Her Majesty's Revenue and Customs was utilised. As the student finance repayments are now income contingent plus the method and organisation used to reclaim it from employee is HMRC, it is often said that repaying a student loan is like taxing a graduate. 

Previous students (full-time) who have taken a loan from Student Finance become liable to start repaying in the April after leaving their course and when their income is over the applicable repayment threshold.

If the student is employed then their employer will use the Pay as You Earn system to calculate the correct amount to take from the employees. The employer pass these monies to HMRC who in turn inform the Student Loan Company so that their records can be amended. Students can access information about their repayment record via an On-Line Account

The amount of loan repayment taken each week or month by your employer is based on your income used to also calculate your National Insurance Contributions.

So Student Finance need your National Insurance Number because your student loan repayment is facilitated by the Student Loans Company in partnership with HMRC. The amount deducted from your wages as an employee is linked to your "NICable income". Student Finance avoid paying the maintenance loan unless satisfactory information has been provided to allow recovery of the loan at a later date. This is prudent, given that students can withdraw from a course at any time so the liability to enter repayment is not always years in the future. 

As with any student finance matter the process and detail is more complex than this. Different rules exist for certain courses, for those who are self-employed or live overseas after they leave their courses. 

If you want to read more detailed information about the repayment of student loans in England and Wales try Repayment of Income Contingent Student Loans Academic Year 20/21

How Parents can decide whether to use savings to reduce their student's borrowing

 

So Taylor Swift made one prospective student's dream come true with a generous donation to support her studies.

Stories about students like this are very rare. What isn't rare though is Parents, Partners, Friends and Family wondering whether or not to donate their savings. to their student in order to reduce the amount of student loan they have to take out. 

Even the student may have savings and are wondering whether to reduce their student loan borrowing.

This can feel like a tough decision and it can be hard to make a proper informed choice. 

Your Reason to help….	Ask yourself….	Explore……
Less Debt - It will reduce how much my student will have to borrow and pay back.	Is this true? Do you have sufficient savings to mean they don’t have to take on any student loan? Does the funder expect you to contribute anyway to your student's living costs? (If the students depends on you financially and your household income is above £25K the answer to this is likely to be yes). Can your savings cover the full fees charged and living costs for the whole undergraduate course and any further study?	Can the savings help more effectively in other ways apart from reducing borrowing, for example ·         Helping with day to day costs ·         Help with rent ·         Help save for beyond graduation
Less Debt – if I pay the fees he/she/they will owe less money and pay back less.	Is this true? Does the funder expect you to contribute anyway to your student's living costs? (If the students depends on you financially and your household income is above £25K the answer to this is likely to be yes).	Can the savings help more effectively in other ways apart from reducing borrowing, for example ·         Helping with day to day costs ·         Help with rent ·         Help student save for beyond graduation
Want to Help – I have saved up for the day my student goes to university for years, I want them to borrow less student loan.	Is this wise? Is this the best use of your capital? Does the funder expect you to contribute anyway to your student's living costs? (If the students depends on you financially and your household income is above £25K the answer to this is likely to be yes). Can your savings cover the full fees charged and living costs for the whole undergraduate course and any further study?	Can the savings help more effectively in other ways apart from reducing borrowing, for example ·         Helping with day to day costs ·         Help with rent ·         Help save for beyond graduation
Sacrifice – I need my savings myself but feel I should sacrifice them as it seems wrong for my student to borrow so much and be burdened with debt.	Is this wise? What might happen if you need your cash reserves? Does the funder expect you to contribute anyway to your student's living costs? (If the students depends on you financially and your household income is above £25K the answer to this is likely to be yes). Can your savings cover the full fees charged and living costs for the whole undergraduate course and any further study?	Can the savings help more effectively in other ways apart from reducing borrowing, for example ·         Helping with day to day costs ·         Help with rent ·         Help student save for beyond graduation, for example by helping them open Life-Time ISA
Well off – I have plenty of money saved so I am not worried about using it	Do you need your savings yourself? Does the funder expect you to contribute anyway to your student's living costs? (If the students depends on you financially and your household income is above £25K the answer to this is likely to be yes). Can your savings cover the full fees charged and living costs for the whole undergraduate course and any further study?	Can the savings help more effectively in other ways apart from reducing borrowing, for example ·         Helping with day to day costs ·         Help with rent ·         Help save for beyond graduation
Play with the repayment calculator here on Money Saving Expert  see how much a student’s repayments are altered by borrowing less

One thing that is true is that if you use your savings that money will be gone.

If a student takes the Tuition Fee Loan and the Maintenance Loan to pay for their tuition and living costs then while how much they borrow may be a set amount, how much they pay back is not.

Repayment of government Student Loans for students from England Wales taken out since September 2012 is Income Contingent…..this means it depends on how much the graduate student earns from the time they become eligible to repay. It does not depend on how much they have borrowed.

Use the Money Saving Expert Calculator to test your assumptions that by reducing a student’s borrowing means they will pay less back to the government.

Try changing the amount of the fee loan and/or living cost loan borrowed.

Play with the assumptions about beyond graduation earnings.

Would a lump sum from you alter what the student might pay back over the term of the loan?

This may help you decide how best to utilise your hard earned savings.

Read More: 

From a Parent to a Parent and Bank(-rupt) of Mum and Dad

                                

How Taylor Swift made a dream come true & why it mattered

 

So Taylor Swift just gifted £23,000 to prospective student Vitoria Mario!!

This is a Story Sweeter Than Fiction, apparently Vitoria set up a fundraising page where she was asking for help towards her expected living cost so she could attend her desired Maths undergraduate course. 

Call It What You Want - but it's a very generous gesture on behalf of  the Gorgeous Ms Swift. Everything Has Changed for Vitoria who initially probably thought it was a Hoax, but once confirmed she has likely just had the best August ever. 

The story was that Vitoria wasn't eligible for living cost support in the form of the Maintenance Loan or Grants from Student Finance England. Without this Vitoria says she was worried she could not afford to go to university.

Read all about it here:-

https://www.bbc.co.uk/news/uk-53857694 

 

So Today Was A Fairytale for Vitoria with a gesture going beyond her Wildest Dreams, but how has it left you feeling? Are you jealous, thinking how come she is The Lucky One? Are you having Mean thoughts? Well best to Shake it Off asap and get ready with Eyes Open to embark on your own higher education journey feeling Fearless regarding your own funding entitlement, understanding the loan repayment rules and with robust plans to cover your course and living costs. Are you ....Ready for It?

We are going to look here a little at the funding entitlement residency rules.

Residence Entitlement Rules

These rules are complex but in order for most school leaving undergraduate students to be entitled to help towards tuitions fee and living cost support from Student Finance England, they need to  

• have no restrictions on their right to live in the UK (known as Settled Status) and
• normally live in England (known as Ordinary Residence)
• have lived in the UK and islands for 3 years before the course began

These students are eligible in the category of "Persons who are settled in the United Kingdom".

However the rules a lot more complicated and there are other residence categories a student may fall into that may make them eligible for some or all of the funding.

So why was Vitoria unable to get the help she needs towards her living costs?While we do not know all the details of Vitoria's case, the press story says she

• is from Portugal
• has lived in the UK for 4 years
• her mum still lives in Portugal

So on first sight it may look like Vitoria should be entitled to Tuition Fee Loan and Maintenance Loan (for living costs).

However as Vitoria is from Portugal she may not have satisfied the "Settled Status" criteria. She is likely to have fallen into the eligibility category of "EU National" The rules for EU Nationals includes the requirement that the student has been

"ordinarily resident in the United Kingdom and Islands throughout the five-year period immediately preceding the first day of the first academic year of the course.."

Importantly for EU Nationals this currently only applies to the Maintenance Loan and other living cost support. So fortunately Vitoria is still likely to be eligible to receive the Tuition Fee Loan. However Brexit is going to  bring to an end this entitlement to tuition fee help for EU National for academic year 21/22. 

So because of these complex and changing rules linked to Brexit, Vitoria would have needed to commence her course in 20/21 ahead of having reached the 5 year residence that would have afforded her living cost support. 

Top Tip Always seek advice about residency rules to make sure you have received the correct advice if you are refused funding.

So thanks to her fundraising effort and generous donations from sponsors including Taylor Swift, Vitoria has achieved a great result to support her study ambitions and easing her money worries. Well Done!!

Hey, sorry about the cheesy lyric references, Look What You Made Me Do Taylor Swift !!

Please read our next blog post which will explore what you should consider if you also have a sponsor with savings who is considering donating to your fees or living costs.

Useful References

Categories of Eligible Students 

• https://www.ukcisa.org.uk/Information--Advice/Fees-and-Money/England-fee-status
• https://www.practitioners.slc.co.uk/media/1785/sfe-assessing-eligibility-guidance-ay-2021-v20.pdf  (pages 19 to 46)

Where might Clearing Lead You? To a First Class Honours!

 

Here is a Fresher walking into Edge Hill University on his first day

Facts

1) Edge Hill had been his third choice University

2) On A Level results day he did not achieve the grades for his first choice university

3) On A Level results day he got an offer from his second choice university but since making that choice he had changed his mind about wanting to study there.

4) At 9am on results day he rang Edge Hill who rapidly came back with an offer, guided him through the scary part of declining the offer from the second choice university and  reassured him their offer would be made firm.

5) By noon he had secured his place at Edge Hill

Outcome - Three years later he graduated with a First Class Honours Degree having loved his time in Ormskirk

What's the buzz about Clearing? Six Money B's to help.

 

Be Wise – Understand what Clearing is all about.

Clearing is a very exciting period in the academic calendar. Exam result can throw a sudden change of plan into the mix and a bit of quick thinking is required.

Yet so many students just hope it won’t happen and don’t want to think about it. It is really important to consider what you would do if results day means a change of plan. It’s not failing it is just shifting stance and that is fine.

Sometimes between picking courses and results day you have changed your mind anyway about second and third choices, or perhaps the institution has changed their mind about you – for better or worse. You may have received offers from universities but no longer want to accept them and want to look elsewhere – that’s what Clearing is for.

It’s okay – it’s exciting but it’s good to have thought about where else you might want to study, have thought about the financial impact and have planned for those changes.

Clearing might turn out to be the best day ever when you look back – so embrace it.

Be prepared – it’s the early bird that catches the worm

Hopefully once you have learnt how Clearing and Adjustment works you will have a plan in mind for results day.

Universities plan their own strategies well in advance and have an army of staff on hand to deal with their customer queries and help with new offers and to hopefully win your custom.

The universities are eager to fill their courses so as the day goes by fewer places will be in the Clearing pool. It’s makes sense to act as swiftly as possible, though ensure you are comfortable with your decision. Planning ahead will help your swift response not turn into a panic.

Be an empowered consumer

Remember you are a customer of the universities. On results day, unless the university is fortunate to have filled all its courses, they will be waiting and hoping for your call.

The universities open their Clearing Lines early and keep them running until they have filled all the spaces they possibly can. It is a stressful time for the university staff dealing with all the enquiries and changes of circumstances that results day brings. The staff usually offer a responsive service to win your custom so don’t phone the Helpline thinking they are doing you a favour. This flux works both ways – they want you just as much as you want them and they are likely to be flexible on entry requirements.

As a potential customer of the university check out their terms and conditions – usually these are usually found on the website as for example

Student Regulations/University Regulation/General Regulations......

These may be dull but are very important to know about as the intuitions will follow these rules when dealing with their students.

Also see if your university has Student Charter or other form of customer service agreement.

Get to know what support services the university offers such as well-being, advice, careers, help for disabled students etc.

Understand your consumer rights by looking what the Competition and Market Authority advice for undergraduates. 

Be on top - Keep the funder informed of changes of circumstance

This seems obvious but when you are busy it’s easy to forget. If you change university, course etc then the funder (SFE, SAAS, SFW, SFNI) needs to know.

Be informed -Check out your universities of choice on OfS

The Office For Students work to ensure universities are reaching out to all potential students. Each Higher Education Institution submits an agreement about how they achieve this every year.

Read the plans from universities of choice – there may be details of extra financial help that you may be eligible for.

Be flexible on accommodation

Changing university in August can mean that your accommodation plans have to change too. Not all universities will have accommodation for all their first year students. Those who accept a place through Clearing may find this an additional challenge.

Again universities are used to this process happening year on year and will provide guidance. You may have to consider living in Private Rented instead of Halls. You may have to start looking for a place at short notice. Remember that it won’t just be you and the university may put you in touch with other students in the same situation. They may have lists of private rented accommodation providers or of shared houses with a room available.  Also prospective students often use social media to find others to share with. So be ready to respond to these options.

Signing your accommodation contract may seem a big commitment and it is. Whether the accommodation provider is a university, private halls, landlord’s agent or private landlord, you will be signing a legal tenancy agreement.

It will be legally binding for the number of weeks outlined and is likely to require the student and a guarantor to sign it.

Know what you are signing for – the number of weeks (these can vary widely 42,44,52 for example); what is the deposit; are there administration fees; what is included in the rent; how many instalments & when are they paid; what are the rules for terminating the contract......

Note that for halls of residence the instalments may not be equal. For example it is possible for the institution to front load the plan so that you pay more in the first term. This can be tough to budget for but it’s best to be prepared.

If you are looking at private accommodation, then many universities offer services to check the tenancy agreement before you sign – worth doing to be safe.

You do not have to go into halls and if you chose private rented then understand your rights fully. Look on www.shelter.org.uk and www.unipol.org.uk for helpful information. Also learn about Tenancy Deposit Schemes

Remember if you are a student choosing to live at in the parental home consider how you might contribute to the household bills from your student finance. Child benefit payments will come to an end for those who had parental responsibility for you.

This video on Fresher’s Accommodation may help you think about where to live.