Guest blog by Alex Bairstow, HEPP and CO Programme Co-ordinator, Higher Education Progression Partnership

Worries over tuition fees - and an increased reliance on student loans - are seen as the major barrier for young people considering higher education.

Students may also have heard recent announcements to replace maintenance grant funding with increased student loans; and NHS-funded bursaries with tuition fee and maintenance loans*.

The headlines will tell you that students entering Higher Education in September 2016 face the prospect of graduating with over £50,000 student loan 'debt' – and that’s before interest.

Having worked in Higher Education student finance for the last 15 years, I know the value of explaining the situation clearly, so students and parents hear the reality, not the scare stories.

Although HE isn't for everyone, I firmly believe if someone is bright enough and has the desire, then finance should never be a barrier to aspirations. So here’s what they should bear in mind:

Under the current system, students only begin making repayments once their earnings reach £21,000 per year (£1,750 per month gross). At which point, they pay an extra 9p for each £1 they earn above £21,000.

For example, someone earning £25,000 per year would pay £30 a month - around the cost of a mobile phone contract or perhaps a gym membership.

So if they’ve earned a great wage, they’re likely to have paid off a substantial proportion of their loan, perhaps all of it, before 30 years. Arguably that should be the case, as they’ve benefited from the education and should therefore repay a substantial proportion of the cost.

If earnings have been lower, their monthly repayments will reflect this. They repay a contribution towards their education through the student loan repayments for 30 years, after which the remainder will be written off. This also seems quite fair.

Back in 2012, when £9,000 fees were first introduced, Martin Lewis (Money Saving Expert) tried to calculate how much someone would need to earn to repay all of their student loans (taking into account wage inflation) over the next 30 years.

Assuming someone took out the maximum fee loan and maintenance loan over three years, Martin calculated they would need to earn approximately £35,000 per year, from graduation, in order to repay their full balance, plus interest, within the 30-year repayment period. Some people may find that assessment terrifying, some reassuring.

For me, it says students need to be earning a really good salary, right from the off, in order to have to pay back the total cost of their education. And if they aren’t earning at those levels, then they will pay some back, with the rest being written off.

A graduate tax doesn’t have a balance or an interest rate (the two scariest things about the student loan system). It’s an amount deducted from your salary each month, which goes directly to the government to contribute towards the cost of the education. The higher their earnings, the higher the deduction from the wage slip each month. Always bear in mind that this, in essence, is how the student loan repayment system operates.

Most universities and colleges will offer bursaries and scholarships which are not repayable and can be substantial. Each provider will have their own different bursaries with their own criteria and application processes. So students need to do their research.

It’s worth noting that previous changes to finance arrangements, such as the increase in tuition fees to £3,000 in 2006, and subsequent trebling of the fee cap to £9,000 in 2012, didn’t have the profoundly negative impact on the number of students applying to HE that many anticipated.

In fact, the number of people going into Higher Education has pretty much increased year-on-year over the last decade. Which perhaps proves students understand that the benefits outweigh any concerns about the cost.

*NB: Details of the changes to student support for NHS-funded students is still to be confirmed at the time of publication (May 2016)