1.3. million students are about to start university. Having got through their exams and amid all the excitement and nervousness of starting a new life in a new place, there is also the new problem of money. Key to this is the application for a student loan. So what is it, how do you get it and what else do I need to know? Here is a simple guide.

Q: What are student loans and do I need one?

A: Universities can charge up to £9,535 a year in tuition fees. But you don't have to pay that yourself. You get a special student loan from the government. This is unlike any other loan - I'll explain how a little later on - and in fact almost half (44%) of students have their debt wiped out, never having to pay it all back.

If you get a student loan - you will be in good company. The Government forecasts the value of outstanding loans to reach around £500 billion (2023‑24 prices) by the late-2040s.

So unless your family is paying the fees directly, you will need a loan to cover the university fees.

Q: Why is a student loan different from any other loan and why do people seem so calm about taking on this big debt?

A: As I mentioned it's thought that going on for half of student never have to pay the full loan back. That's because a student loan is not like anyother loan. Think of it more like a graduate tax.

You only have to start paying the loan back when you start earning over a certain amount. That amount varies depending on when you started Uni and what country you live in but for exampl, in England it is £25,000 a year. Once you earn over that amount, a bit of money is automatically deducted from your salary and goes towards paying the debt off.

You pay 9% of the bit of your salary above £25,000. So if you earn £30,000 a year, you would pay 9% of the difference between 25,000 and 30,000. That's £450 a year. So the cost of paying back your loan, in this example, is £450 a year.

After 40 years, whether or not you have paid the debt, the whole dent is written off. The 40 year period differs depending on what plan you are on- but you are likely to be in your 60s before it is wiped out, if you haven't paid it off before.

Q: Can I overpay my loan to pay it off quicker?

A: Yes you can overpay, but you can't miss payments. So only overpay, if you think you are not going to miss the next payment.

You may also want to weight up whether it is better to put money down for a house/flat deposit rather than pay it off early. This will depend on your priorities and personal circumstance.

Q: So that is all about the Uni fees - but what about living expenses?

A: Good question - yes in addition to paying for your course you need money for accommodation, food and all those famous tea and cake parties students have.

The Maintenance Loan is partly means-tested, which means that how much you get is based on what your parents earn. It will also vary depending on whether you live at home or have moved to separate accommodation. Everyone should get something though.

The amount you get will vary from around £3,900 to £13,700.

Q: Do all universities charge and if so do they all charge the same amount?

A: Universities in Northern Ireland and Scotland often charge less then those in England or indeed charge nothing to students who already live there. In Northern Ireland local qualifying students pay up to £4,855. In Scotland, qualiftying Scottish sudents, don't have to pay anything. That doesn't mean that if you are an English student you can go there for free - you will have to pay I am afraid.

All the universities seem to me to charge the same - but even if there is a difference, I think compared to what you hope to get out of it and the time period you will pay it back over - there is not much point in shopping around for the cheapest deal.

HOWEVER.... degrees in Scotland tend to be 4 years long and so you will end up paying more if you study there than elsewhere in the UK.

Q: What is the interest they charge on student loans?

A: It depends on the plan that you are on but the latest are around 4.3% and it's higher if it is a post graduate degree. But the interest rate will change and so it is not possible to predict what it will be in future years.

Q: What if my parents won't pay for my maintenance, even if the rules say they should?

A: In this not so common but very upsetting situation you can apply to be seen as estranged from your parents and in such circumstances you will be assessed onm your own income, which is probably zero. You may then get the full maintenance from the state.

See here for more details.

Q: OK - how do I apply for all this money?

A: To apply here are the main contacts

England

Phone: 0300 100 0607

Website: Student Finance England

Northern Ireland

Phone: 0300 100 0077

Website: Student Finance Northern Ireland

Scotland

Phone: 0300 555 0505

Website: Student Awards Agency Scotland

Wales

Phone: 0300 200 4050

Website: Student Finance Wales

A QUICK NOTE FOR HISTORY BUFFS

The Education Act 1962 forced local education authorities to pay the tuition of students attending full-time first degree courses and to provide them with a maintenance grant. No repayment was required, although most local education authorities had in practice already been paying students' tuition fees and providing maintenance grants since the Second World War.

Student loans were introduced in 1990 under Margaret Thatcher but were also maintained under subsequent labour governments. The student loans system aims to ensure that upfront costs do not deter potential students. Graduates repay student loans and they generally have above average incomes.

Amongst the reasons given for the launch of the loans were, according to the then Education Secretary, John MacGregor that "Students themselves will join their parents and the taxpayer in bearing the cost of their support, as they do in all other comparable countries. We believe that—not least given the high taxpayer cost and comparative generosity of our system of student support—it is not unreasonable to say now that students should also make their own contribution".

In his summer Budget 2015 Chancellor George Osborne announced that maintenance grants (The bit that pays for your rent/food/going to the cinema etc) would end for new students from 2016/17 and also be replaced by loans.

Q: I've heard of grants as well as loans - what are they?

A: As well as the student loan system - there are a range of grants you may be able to get. This is money that never has to be paid back.

Usually there are strict criteria for those who are eligible. There is a guide to these extra sources of money from UCAS which you can find here, It is worth looking at but is not great.

There is a better guide from SaveTheStudent, which you can find here

The terms 'bursary' and 'scholarship' are interchangeable across universities. However, there tends to be one difference:

i) Scholarships are likely to be competitive and often supported by generous donors.

ii) Bursaries are usually non-competitive, automatic and based on financial need. They may also be described as 'awards'.

One of the best places to look is Blackbullion which says it has overseen £25 million of extra funding. Check out the site here

The awards are based on a variety of criteria including your current situation, your university and also the course you are studying. The website allows you to use filters on its funding hub to view the funds that are available to you. Worth a look if you are concerned about your finances.

Q; £9000 odd is a lot of money - how do our uni fees compare to those of other countries?

A: Good question. We are expensive by comparison with a lot of other countries. In fact on some measures we are the most expensive.

The US is often thought of as the most crazily expensive place to study - but it very much depends on where you go. A private US university is probably the most expnsive place to stiudy in the world - but state universities are actually cheaper than in the UK