Should I get a Postgraduate Loan?
Getting a loan is never a simple decision and getting a postgraduate loan can be as tricky. If you want to study then it is very likely that a loan will be the only way that you will be able to afford it. Although even if you can afford the course you might still decide that you would like a loan. It is important to understand how the loans work so that you can make up your mind whether they are the right choice for you.
How a postgraduate loan works
A postgraduate loan works in a similar way to a student loan. The amount you can borrow is different though as you can choose how much to borrow up to a certain ceiling. This is based on the cost of the average postgraduate course cost. It might be that your course costs a lot less than the average and you will have a lot more money available than those who have high fees and so need to borrow more just to cover the fees. It is possible to only borrow a small amount and then apply for more if you need it so you do not have to decide immediately on how much to borrow.
The loan has no interest charged on it while you are studying and you do not have to start repaying it until the April after your graduate. Then you will be charged a percentage of any income you earn over a certain threshold. This means that if you are a low earner or have no job at all you will not have to make repayments. The loans are written off after 30 years. It is worth noting that if you have a student loan form your first degree you will have to repay this at the same time. As both have repayments based on earnings you will only make repayments to both once you are earning enough.
How to decide whether to get one
It can be tricky deciding whether to get a loan like this. You need to make sure that you will gain from the course that you are taking. It will be wise to think about the career prospects that will open up as a result and whether these are something that you want to pursue. This will help you to think about whether the loan will be good value for money. Although many graduates realise that they may not repay all of their loan as many students do not, it is wise to assume that you will. Then you can really analyse the value for money properly. If you do not end up repaying it all then you can see this as a bonus.
You also need to think about the impact of repaying the loan. Although you only repay when you can afford it, you will have two loans to repay if you have a student loan as well. This means that you will be repaying more money once you are earning enough. This will still not be huge amounts but it will make more difference than just the one loan repayment. It is worth finding out exactly how much you will have to repay and when – so how much a month you will repay on both loans at each pay level, so that you can see clearly what your obligations will be. This should allow you to consider whether this will be affordable for you. Omacl.co.uk have some great offers on short term funding solutions which may also serve as a viable alternative.
If you have enough money to pay it without a loan then you also have a dilemma. You could get the loan anyway and you may not have to repay the full amount. You could keep your savings earning interest and then make the loan repayments when you have to and you could gain a lot of money. However, you have to decide whether you feel happy with ding that. You will effectively be using tax payer’s money to pay for a course that you can afford and gaining interest from that. You are not breaking the law, but it might be something that you are not really comfortable with. It is good to just consider how you feel about doing this and also how you might feel in the future.
It is not an easy decision and no decision to borrow ever is. It is good to think about the value for money that you will get form the course. Although thinking about your future career is important, also think about anything else that you might gain from the course as well. Also consider any impacts the loan repayments might have, especially having to make them potentially alongside other student loan repayment but do bear in mind that these are means tested and will only happen if you are earning over a certain amount of money.