Finance · 6 min read

How Do Student Loans And Grants Work?


Life as a student can be a rollercoaster. Not just in terms of living away from home and all those wild nights out, but financially speaking too. Everyone knows that students aren’t exactly famous for being loaded. Luckily, this is where student grants and loans come into play.

Don’t get carried away and think this just means: “Free money!” All this cash needs to be handled responsibly. Luckily, this guide is here to equip you with the skills to wield this financial power sensibly.

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What Are Student Grants?

Wouldn’t it be nice if university was free? Unfortunately, in the UK, most educational institutions will have a cost of attendance. In other words, students need to pay to attend.

This is where the holy grail comes in: Student grants. These are great because they lend cash to get through university or college and don’t need to be repaid.

The student grant application process involves setting up a finance account online, submitting proof of identity and verifying household income, something that will need parental or partner confirmation.

Scholarships are also available in certain circumstances, depending on the educational institution, subject, and potentially your household income. So, if you’re a star at a specific subject, try and sniff out scholarships to make the most of your expertise.

What Are Student Loans?

On the flip side, student loans. Unlike grants, loans need to be repaid - unfortunately.

The Student Loans Company (SLC) extends cash for tuition fees and maintenance. The former goes straight to your institution to pay your tuition, the latter goes straight to students to cover their day-to-day living expenses.

Loan amounts depend on household income, with those from low-income backgrounds eligible for larger sums.

How Are Student Loans Repaid?

Student loans sound pretty great, right? Then, bang! A day will come when the SLC will want you to begin repaying this cash, plus interest. This is the rate you’re charged for borrowing money. Annoying. But that’s the way it is.

Don’t worry. You won’t be slapped with a massive paycheck as soon as you finish uni. Every borrower is put on a repayment plan dependent on factors including income, year of university departure, and degree level. If you’re unsure what repayment plan you’re on, just check out the SLC or UK government website.

Can Student Loans Be Forgiven?

We know what you’re thinking: “Is there any way I won’t need to repay my loan?”

Don’t get too excited because the SLC only offers loan forgiveness programmes for a handful of reasons. If the debt has been written off, if the borrower dies, or if the borrower becomes unable to work due to a permanent disability.

So, for anyone thinking they can simply run away from their student debt, this probably won’t work. Bummer.

What If I Can’t Repay My Student Loan?

Student loans can sound big and scary. They can involve a lot of money after all. What if you can’t repay it?

Just like any loan, things can get a bit sticky if you don’t repay them. Namely, this isn’t gonna look great on your credit score, so best to avoid this if you can.

If you are struggling, loan consolidation and refinancing with private companies may offer relief. Consolidating multiple loans into one or refinancing with a new loan can provide a streamlined repayment approach.

Additionally, financial aid appeals can be launched with your university to explore repayment adjustments.

How To Manage Student Loan Repayment?

To steer clear of this financial chaos, let’s talk debt management - the game plan for handling and, hopefully, reducing your student debt.

Budgeting is gonna be the superhero here. We know it’s no fun, but it’s a vital part of successful long-term financial planning. Track your expenses, prioritise necessary spending, and try downloading a budgeting app. Especially if you struggle with saving, these can help keep you focused and motivated.

And if you're juggling loan repayments and the struggle is real, time to rethink the way you earn.

Work-study programmes are a power move. Get that cash flow while hitting the books so you can handle loan repayments like a pro.

Oh, and say hello to side hustles! Prograd's got your back with plenty of work opportunities near you. Fill in our 10-second form and get started today.

All these options can help you be prepared for those pesky student loan repayments. Still, we all know life can throw some serious curveballs. Having an emergency fund is always a good idea when you start any kind of long-term saving.

No repayment should leave you broke, right?


Student loans and grants might scream money, but this guide spills the tea – it's not all sunshine and rainbows. Handle them wisely, from the moment you get that financial boost to the day you start paying it back.

Equip yourself with financial literacy so you can decipher the language of loans, set clear goals, and dive into long-term planning and budgeting, That way, your financial future? It’ll be safe in your hands.

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