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Student loans

Your loan: what to do with it?

Your bank account suddenly has an extra £3,000 in it. Your student loan has arrived, and it's time to work out the best way to handle it.

Your student loan is intended to help you to cover costs such as rent, food, transport and bills. Check out Directgov 1 to see how much you are eligible to borrow.

So now what? Should you spend it? Save it? Invest it? These students explain what they did with their loans.

  • Spend it

    'When your loan arrives, it's like someone has just given you money to do whatever you want with – but after rent, I only had about £150 left over each term, which quickly went on food and living expenses.

    'My advice is to make a budget, especially in the first term when you're not used to paying your own bills.'
    Carys Samuel – Public Relations, Leeds Metropolitan University

  • Save it

    'I worked through my gap year, so I saved enough to cover rent and living costs at uni. I worked through my summer holiday, so I could invest my second-year loan. Across both years, I earned £250 in interest – not bad!'
    Rafael Cohen – Physiology and Psychology graduate from Oxford

  • Invest it

    'Before uni I worked on a punt, carrying tourists up the river. I figured I could earn more if I ran the business. So I invested my loan in my own punting business.

    'I bought a punt, paid for a commercial river licence and insurance. But I was soon earning more than enough to cover my living costs.'
    Owen Sanderson – History, Cambridge University

  • What to do if your loan doesn't arrive

    Student Additions Loans When you're starting uni, the last thing you want to worry about is your student loan, so follow these tips on what to do if you end up temporarily loan-less.

    Late payment

    Missing or incorrect details can result in delayed payments, and your 1st step is to get on the phone to the Student Loans Company (SLC) 1 and see if they can explain what's happening.

    Wil Chivers, who studies Criminology and Sociology at Cardiff, had this very problem. Halfway through his 2nd year a missing form meant Wil received £1,300 less than expected in his 2nd instalment. 'I had £300 to live on for 3 months and that barely covered 1 month's rent.'

    If you’ve forgotten to send in your form, don't panic. 'Even students applying just before term can get the majority of their money when they enrol,' says an SLC spokesperson. 'They must apply online, prove their eligibility with their passport number, return their signed declaration form, and then register and attend university.’

    If you're applying for the 1st time, apply online at  Directgov 1 as early as you can.

    What to do next

    After ringing the SLC, get in touch with family and see if they can help out short-term. If you're worried about borrowing from relatives, why not suggest a repayment plan?

    Next, visit your bank manager and ask for an overdraft or an extension on it. It's worth taking these steps early, in case – like Wil – your loan takes a while to turn up.

    'I had to wait until the summer for my back-payments. I never thought about getting further loans or credit cards, but I did start to use the interest-free credit card that came with my student account.'

    Ask for help

    There's nothing to be ashamed of. Talk to your landlord about a payment plan or, if you're in halls, speak to the university accommodation services and approach student support services.

    Don't panic

    Although financial worries can feel overwhelming, make a plan and stick to it. Cut down on costs, get help and make sure your lecturers know the problem.

    The SLC will do its best, but it's a double-sided bargain. Make sure you've done everything you need to, so your money arrives in time.

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