Student Finance England Loan Deadlines 2016/17: When Students Should Apply for Non-Means Tested & Income Based Loans

Students planning to start or resume full-time courses at colleges and universities for the 2016/11 academic year may find it useful to apply for Student Finance England loans earlier rather than later. Those that hit government deadlines will stand a far better chance of being paid their loan on time for the start of term. What are the deadlines for student finance this year?

Student Finance England Deadlines for Non-Means Tested Loan Applications

If a student is making an application for finance that doesn’t need to be means tested then they are being asked to apply by the 23rd of April 2016. These applications are based on circumstances where the parental/household income will not need to be checked during the loans process.

Student Loans Applications That Will be Based on Income Assessment

If a student is making an application that will be means tested then their application date is the 21st of May 2016. The finance given here may be based on the income of the household.

What do the Student Finance Application Deadlines Mean?

The recommended deadlines are based on giving a better chance that a loan will be paid in time for the start of the student’s academic year. There may be, as was evidenced in recent years, no guarantee that finance will be processed on time but hitting the deadline may give the best chance of this happening. Applying later may delay the payment process.

Should Student Loan Applications be Made Through Student Finance England, Student Finance Direct or DirectGov?

Online applications are now initially made via the government’s DirectGov website. Students can also download a paper-based application from the site’s student areas if they prefer not to apply via the Internet.

The official name of the UK’s student loans company has now changed from Student Finance Direct to Student Finance England. The base organisation remains the same and any student that has applied for a loan previously can use the same details for new applications.

What if the Student Hasn’t Been Offered a Place Yet?

The DirectGov website recommends that students try to meet the application deadlines even if they haven’t got a firm offer of a university or college place yet. Students can simply enter their first choice on the form and change it later if necessary.

Using a Student Finance Calculator May be Useful

Those that are unsure how much finance they may be qualified to be given can use the DirectGov student finance calculator. This gives an estimate (but not a guarantee) of options including student loans, grants, scholarships and bursaries. This may be worth doing to help assess income before starting college.

General Money Management Tips for Students

Those about to leave home to study for the first time may need to set up financial accounts and to think about budgeting their money. Choosing the best student bank accounts and other financial products such as credit cards can help with this process. Thinking about how they will manage their money at university may also give them a good start.

Student Finance: Setting up a Student Account with an Overdraft

On deciding to undertake further study at University, many students will be offered a wide range of financing options from banks and other financial institutions. Products include student loans, credit cards and overdraft facilities. The student overdraft can be a useful tool. However, it is also one which can lead to significant long term financial problems, if not used right.

What is an Overdraft Loan Facility

Simply put, an overdraft is a form of short term loan between the bank and an account holder. The overdraft facility allows the account holder to run a negative bank balance to a pre-agreed level, without incurring penalties. Overdrafts typically do not have repayment dates, as with standard long term loans, and may be seen as an “ongoing” source of finance. Many student overdrafts however, are required to be paid back within a specified period of time after graduation.

Setting up a Student Account with an Overdraft Loans Facility

Generally most banks offer an overdraft facility as a standard feature of a student account. In order to obtain the feature a student usually needs only to “opt in” when setting up the account in the normal way. In order to qualify for a student bank account, most banks will require proof of either current attendance on a full time course. Alternatively, proof of an upcoming placement may be accepted.

In choosing an overdraft there are a wide range of limits and options available, in the first case one should ensure that the overdraft is interest free and has no associated charges. Secondary conditions worth bearing in mind are, “can the overdraft be increased after the first year?” and “how soon does the overdraft have to be paid back after graduation?” Banks often offer a variety of incentives to sign students up to accounts with overdraft facilities, whilst one should take advantage of these offers, they should not be used as the basis for serious financial decisions. In making a decision, the terms and conditions of an account and its features are much more important.

The Pros and Cons of an Overdraft Facility

The major advantage of a student overdraft facility is that they are usually provided at a 0% interest rate, with no additional charges. As such the student overdraft is one of the cheapest forms of finance available, even when compared to an SLC student loan. As such, even if the extra finance is not required it may be worth considering the profit which can be made from using the overdraft limit to invest in an interest bearing investment, such as a cash ISA.

The overdraft facility does however, have its negative points. Like all overdrafts, the facility is a short term credit agreement. Technically a bank can call in an overdraft with very little notice, although this is unusual with a student overdraft.

Additionally one should also consider the penalties associated with an overdraft. Whilst regulators have taken a keen interest recently, penalties for exceeding overdraft limits can still be extremely high. Dependent on the terms and conditions, penalties may be applied on daily basis, leading to significant financial problems for those who misuse the facility.

Whilst an interest free overdraft represents a good cheap source of finance, many students often taking out multiple overdrafts, find themselves in the position of having to take out a student consolidation loan. A student consolidation loan is essentially a loan taken out, which consolidates the overdraft into a regular loan with repayments. Here, interest rates will apply and the prospect can become an unattractive one as personal debt it increased.