Student Loans Company(SLC)

Almost 93% of students residing in the UK attend public schools. This means the schools are funded by the Government. However, this changes when students move on to pursue university studies. University education is not free in the UK, USA and many other countries are also expensive. Such high costs put higher education out of the reach of many students. However, with public sector organizations such as The Student Loans Company (SLC), students are able to obtain the funding required to complete their higher education. The aim of the SLC is to provide loans and grants to as many as one million students annually in order to complete their higher education. This loans and grants system is applicable to universities and colleges that are in England, Scotland, Northern Ireland and Wales.

About the Company

The Local Education Authorities (LEAs) were responsible for funding most students’ education since 1945. The LEAs also paid students a non-repayable sum of money (grant) that helped them with living expenses. The Education Act in 1962 legalized and made it compulsory for all LEAs to provide full-time maintenance grants to all university and college students. This ruling was changed in later years. The SLC was formed in 1989 due to a loans scheme introduced by the Education Act 1990 and the Education Order 1990. The aim of the SLC is to provide students with the ability to obtain low interest loans that will help them with their living expenses. Government legislation passed in 1997 ensured that students contributed a certain sum for their university education. This ruling significantly increased the SLC’s total loan amounts. As at the 2005/2006 academic year, the SLC was responsible for providing nearly £2.7 billion in loans to university students.

Types of Loans

The SLC provides various methods of financial assistance where student loans are concerned. The grants and loans are deposited straight into the students’ bank accounts while the tuition fees are paid directly to the educational institution. Eligibility depends on the students’ course, their place of residence and their circumstances. There are various types of loan provided by the SLC that students can take advantage of. These are:

  • The Tuition Fee Loan that covers the full cost of the tuition fee. This loan enables students to apply for partial or full tuition fees. Any cost that is not covered with the loan will have to be paid by the students.
  • Maintenance Loans that provide students a stipend to cover their living expenses. This loan is applicable to students from low income families. Students doing teacher training courses are also applicable for the maintenance loan.
  • Grants for living costs that also cover living expenses, but are awarded only to students from under-privileged family backgrounds. There are several types of grants awarded to students.

There are several other types of loan that can be used to cover tuition and living expenses. The three types of loan mentioned above are the most common. Visiting the SLC official website http://www.slc.co.uk/ will assist students to obtain a better understanding of the type of loan and their eligibility criteria.

Repayment Methods

Every loan taken has to be repaid. The repayment method when a loan is taken from the SLC begins only once the student has completed his or her higher education and is employed and earning more than £15,000. Although these loans have low interest rates, the amount will depend on the rate of inflation. The amount payable will depend on the student’s gross income. This amount is paid until the loan is completely repaid. This method of repayment, which is referred to as Income-Contingent Repayment, makes it ideal for students who are likely to start off their career with low salaries and therefore be unable to commit to a large loan instalment.

Loans obtained through the SLC ensure complete tuition expenses and living expenses in order for all students to complete their higher education. The grace period granted for repayment extends up to the time the student completes the education and secures employment, which frees the student to concentrate on studies without having to worry about the loan repayment during their studies.