Five things EVERYONE should know about student finance

2. There is an official amount parents are meant to contribute, but it's hidden.

You are also eligible for a loan to help with living costs – known as the maintenance loan. Yet for most under 25s, even though you are old enough to vote, get married and fight for our country; your living loan is dependent on household (in other words, parents') residual income. For 2021/22 starters, the loan is reduced from a family income of just £25,000 upwards, until around £61,000 (or £69,000 if you're going to uni in London), where it's roughly halved.

This missing amount is the expected parental contribution. Yet parents aren't told about this gap, never mind told the amount. I'm in the midst of talking to ministers to try and get them to change that, but nothing has happened yet.

So for now, when you get your letter saying what living loan you get, you'll need to work out the parental contribution yourself. To do this just subtract your loan from the maximum loan available – or even better, our parental contribution calculator. will do it for you. (As an example, for all 2021/22 starters, it's £7,987 if living at home, £9,488 away from home, and £12,382 away from home in London).

Of course some parents won't be able to afford it – and you can't force them to pay. But at least knowing there is a gap helps you understand what level of funds are needed. And it's important to have this conversation with your parents and discuss together how you are going to plug the hole. 

In fact, while the papers often focus on tuition fees, I hear most complaints from students that even the maximum living loan isn't big enough. Funny isn't it, after everything that's said, the real practical problem with student loans isn't that they're too big, it's that they're not big enough. 

So when deciding where to study, look at all the costs, transport, accommodation (will you get into halls?), as that's a key part of your decision.

4.  Interest is added, the headline rate is 4.5%, but many won't pay it. 

Student loan interest is set based on the (RPI) rate of inflation – the measure of how quickly prices of all things are rising and it changes annually each September, as follows...

While studying: RPI + 3%. From September 2021, it's been 4.2% (due to a temporary rate cap; this will drop to 4.1% from October before the rate reverts to 4.5% in January). 

From the April after leaving: It depends on earnings. From September 2021, for those earning under the repayment threshold it's RPI (1.5% at the time of writing), rising on a sliding scale to RPI + 3% if you earn over £49,130.

So many graduates won't actually be charged the full 4.5% rate. In fact many graduates won't actually pay any interest at all.

That’s because the interest only has an impact if you'd clear your initial borrowing in full over the 30 years before it's wiped. Many won't. And even of those who will, all but the highest earners won't come close to repaying all of the interest added. For far more on this see my Should I pay off my student loan as it's 4.5% interest guide.