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Scottish postgraduate loans announcement

Postgraduate Loans in Scotland

The Scottish government is considering proposals for £9,000 postgraduate Masters loans. This funding is designed to provide an option for Scottish postgraduates who aren't eligible for the English postgraduate loans introduced in 2016.

Though first put forward in December 2015, the proposals are still being reviewed by the Scottish government. This means that Scottish Masters loans will are not available in 2016-17.

However, in the meantime, the Student Awards Agency for Scotland (SAAS) has increased the number of postgraduate certificates and diplomas covered by its existing postgraduate loans scheme.

This page provides an outline of the Scottish Masters loan proposals as well as an explanation of the current system of postgraduate loans in Scotland. We'll update this information as and when more details emerge.

Scottish Masters loan proposals: key points
What? Student loans for taught postgraduate programmes in the UK. May include PGCert and PGDip courses alongside Masters degrees.
How much? Up to £9,000.
Who? UK nationals ordinarily resident in Scotland. Eligibility for EU students is possible, but unconfirmed.
Where? Any UK university.
When? Scottish loans are at the proposal stage. They will not be available in 2016-17.
Repayment? Debt may be combined with undergraduate loans (if applicable). Debt may also be written off if graduates work and pay tax in Scotland.

Postgraduate diploma loans in Scotland for 2016 (SAAS loans)

Unlike other UK countries, Scotland already offered a postgraduate loans system prior to 2016. However, this funding is restricted to specific subjects and courses and only covers qualifications below Masters level.

The number of eligible programmes was increased for 2016-17, but full Masters degrees are not included.

Which courses are eligible for SAAS loans?

SAAS loans are available for selected courses up to postgraduate diploma level. With some limited exceptions, they do not provide funding for full Masters degrees or PhDs. In most cases they are also unavailable for qualifications that already receive public funding from another source (such as the NHS).

SAAS publishes a full list of eligible courses for postgraduate loans in 2016-17. Note that, with some limited exceptions, supported courses are delivered by universities in Scotland.

Search for eligible courses

You can use our search to view postgraduate diplomas in Scotland. Make sure you check that institutions are offering loans in your subject by using the list of eligible courses.

Which students are eligible?

You can apply for an SAAS postgraduate loan if you are a UK national, most recently resident in Scotland. EU students are also eligible, provided they are ordinarily resident in the EU, EEA or Switzerland.

In both cases your course must have been selected for funding by SAAS (see above). This means that most full Masters degrees will not be eligible in 2016, but some postgraduate diploma (PGDip) courses are.

How much can you borrow?

There are two components to Scottish postgraduate loans:

  • A Tuition fee loan offers up to £3,400 per year (or £1,700 for each year of a two-year part-time course). This money is paid directly to your university.
  • A separate Living-cost loan offers up to £4,500 for full-time postgraduate courses for students under 54.

Living-cost loans are normally available to all eligible students, regardless of previous funding. Tuition fee loans are normally restricted to students who have not received postgraduate funding from public sources (such as student loans) before.

How are the loans repaid?

SAAS loans are repaid at 9% of income over £17,495 per year. Interest will be charged on your loan and linked to inflation via the Retail Prices Index (RPI).

More information

You can find out more about the SAAS postgraduate loans on the SAAS website.

The rest of this page refers to the proposals for new Scottish Masters loans.

Proposed Scottish Masters loans: value

Scottish Masters loans are expected to be worth £9,000. This will be the maximum amount you can borrow, regardless of the length of your course.

The £9,000 amount is intended to cover both tuition fees and living costs for a typical Masters.

How will the loans be paid?

The proposals recommend that students receive a lump sum for tuition fees at the beginning of their course. (This is to help guard against fee inflation by capping the amount available for course costs.)

The remainder of the loan would then be paid in monthly instalments, intended to help cover your maintenance.

Will Scottish Masters loans be means-tested?

No, as currently proposed, postgraduate loans in Scotland will be universally available to all students.

This means that loans will be offered for both tuition fees and living costs. Neither element will be based on the specific fees for your course - or your financial circumstances.

There is a possibility that alternative loan options could include a means-tested element – see below.

Why are the Scottish loans worth less than English loans?

Whereas English students will be able to borrow up to £10,000, the Scottish loans are only valued at £9,000.

However, this actually reflects lower living costs and tuition fees for Scottish postgraduates.

The English loans are only intended as a contribution to student expenses. The Scottish proposals reflect the actual cost of studying a Masters in Scotland.

This has been calculated at approximately £4,594 for a taught program, plus a further £4,500 in living costs.

£9,000 should therefore be sufficient to pay for your Masters degree in Scotland and provide maintenance support whilst you study.

Be aware though that this amount will not increase if you study outside of Scotland. Fees may be higher in England, but you will not be able to borrow more to compensate for this.

What are the differences between English and Scottish Masters loans?

Proposals for Masters loans in Scotland have been prompted and partly informed by the implementation of a similar scheme for English students.

As a result, many aspects of the Scottish recommendations mirror plans south of the border. But there are also several important ways in which Scottish loans may differ from English loans.

The most significant are as follows:

  • Debt cancellation for Scottish income tax payers – The proposal to wholly or partially write off postgraduate debt for Scottish workers is unique. No similar commitment has been made in England, where loan debt will stand for 30 years, or until paid off. This plan would make Scottish loans much more affordable, whilst also incentivising Masters graduates to work in Scotland.
  • No age cap – Initial proposals for English Masters loans set a strict age limit of 30. This was raised to 60 after substantial opposition. So far, the Scottish proposals do not include any age cap.
  • Calculated to cover the full cost of study – The proposed £9,000 value of the Scottish loans is based on the actual cost of studying a Masters in Scotland (including fees and maintenance). In contrast, the £10,000 available with an English loan is a contribution. The likelihood is that students in both countries may incur higher costs than their total loan amount, but the Scottish proposals do reflect lower costs north of the border.
  • Availability for shorter postgraduate programmes – Unlike England, Scotland already offers loans for Postgraduate Certificate (PGCert) and Postgraduate Diploma (PGDip) courses in specific subject areas. This coverage is likely to be extended by the new scheme.
  • Non-concurrent repayments – Instead of being repaid alongside undergraduate loans, Scottish student debt will be combined into a single balance. This will reduce individual salary deductions, but extend the total repayment process.

What about the English loans?

Scottish students may also be eligible for postgraduate loans offered in England from 2016. Provided you are ordinarily resident in England you can apply for £10,000 to study anywhere in the UK. Find out more with our guide.

What about alternative plans for the loans?

£9,000 is the target loan amount, recommended by the review into postgraduate funding in Scotland. This is intended to be a single loan, distributed to students and used by them as necessary.

If £9,000 per Masters student is not deemed affordable, this amount may be split. 50% of the loan would be universally available for tuition fees. The remaining 50% would be available to some students as a means-tested maintenance loan.

Proposed Scottish Masters loans: eligibility

Scottish postgraduate loans are expected to be available on a similar basis to English loans, with some exceptions.

Which courses will be eligible for postgraduate loans in Scotland?

Your course should be eligible for a postgraduate loan if it is awarded up to Masters level and if up to 50% of the programme is delivered as taught content.

At the moment the proposals should cover all MA and MSc degrees (as well as Scottish MLitt courses). Some MRes programmes may also be eligible (provided they include sufficient taught units).

No restriction has currently been set on subject areas.

Will loans be available for part-time courses?

Study intensity and course length have not been addressed at this stage of the loan proposals. It is likely that Scotland will mirror England in offering loans for part-time courses, but this is not guaranteed.

Will loans be available for Postgraduate Diplomas, Postgraduate Certificates and other courses?

Scotland already offers postgraduate loans for courses up to Postgraduate Diploma (PGDip) level in some subject areas.

This support was expanded for 2016-17. It may be maintained if and when Masters degree loans are introduced.

Where can students study with a Scottish loan?

Scottish postgraduate loans will be ‘portable’ within the UK. This means that you will be able to receive a loan to study a Masters in England, Wales or Northern Ireland, as well as Scotland.

Which students will be eligible for Scottish Masters loans?

Student eligibility for postgraduate loans in Scotland will mirror that in England. In order to qualify for support, you will need to be a UK national, domiciled (ordinarily resident) in Scotland.

EU students may also be eligible, but details of this have yet to be confirmed.

Will the loans have an age limit?

Recommendations for postgraduate loans in Scotland do not currently set an age limit. This is in contrast to the English loans, which are only available to borrowers under 60. The current SAAS loans for diploma level courses have a maximum age limit of 54.

It is possible that a similar age cap may be part of a final loan scheme, but this has not yet been proposed.

Proposed Scottish Masters loans: repayment

Full repayment details won’t be available until the Scottish government approves and finalises plans for Masters loans.

The expectation is that Masters loan debt would be repaid on an income-contingent basis, with percentage deductions from salaries over a certain threshold.

In England, postgraduate loans will be repaid at 6% of annual income over £21,000. Scottish loans may adopt a similar repayment method.

However, the recommendations set out some important differences between the Scottish loan proposals and the scheme being implemented in England.

Debt cancellation for Scottish taxpayers

Of particular interest is a proposal to reduce or even write off debt for Masters graduates who go on to work and pay income tax in Scotland (effectively converting their loans into grants).

This plan reflects the fact that postgraduate loans are seen as a public investment in the Scottish economy. By creating a higher skilled workforce the Scottish government would potentially be able to recoup its costs in the form of increased productivity.

Such proposals will be subject to careful affordability analysis and may not be part of the final scheme. However, they would represent a very significant development in postgraduate funding if implemented.

Combination of undergraduate and postgraduate debt

Unlike the English loans, which represent a separate debt, Scottish loans are intended to be combined with undergraduate loans.

Instead of paying off two loans at the same time, you would pay off one larger loan.

This would make repayments more affordable (with only a single salary deduction). However, the total debt would be larger, meaning that you will take longer to complete repayment – with additional interest accruing in the meantime.

Interest rates

Interest rates for Scottish masters loans haven’t been specified. It is possible that the English rate of RPI+3% will be adopted, but this is not guaranteed.

Further information

The document outlining the loan proposals is available online. More information will become available as the Scottish government reviews and responds to these initial recommendations.

It is possible that the opening of loans for English students will prompt further consideration of the Scottish plans.

In the meantime, we’ll keep this guide updated along with our resources on other Masters loans in England and Northern Ireland.

You can also sign up to our newsletter to ensure you stay updated with any further postgraduate funding developments in Scotland – and elsewhere.

Last updated - 01/12/2016

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