PhD loans (also known as doctoral loans) are a relatively recent form of student finance that was introduced in the UK in 2018, they are designed to help students cover the cost of their PhD. A Postgraduate Doctoral Loan can help with course fees and living costs while you study a postgraduate doctoral course, such as a PhD. In this post, we are going to look at the steps to prepare for UK PhD loan application.
Applying for a PhD loan is relatively straightforward and can be done online via the official website of Student Finance England or Student Finance Wales, depending on your residency. Because Student Finance England provides PhD loans in the UK, this article primarily focuses on the application process for students who ordinarily reside in England.
When you apply for a PhD loan, you must consider that this financial support is a loan, not a grant. This implies that you will have to pay the money back, with interest. The interest on a PhD loan is calculated as the Retail Price Index (RPI) plus 3% and is added from the day the Student Loans Company makes the first payment to your university on your behalf. Be sure to evaluate your financial situation and consider whether you need the loan and whether you will be able to pay it back in the future.
See: Top 10 Menial Jobs For PhD Students in the UK
What is a PhD Loan?
A PhD loan is a loan taken out to finance a Doctor of Philosophy degree or a PhD. These loans can be used for tuition, books, fees, supplies, and living expenses while you are studying for a PhD. A PhD loan can be taken from a bank or other financial institution that offers student loans.
These loans usually have a favorable interest rate and repayment terms allowing the recipient to focus on completing their PhD and then repay the loan once they are employed in their field. A PhD loan helps to fill the financial aid gap for doctoral students, who often do not have access to the same amount of federal loan programs as undergraduate and master’s students.
Related: Introduction To UK PhD Loan
Differences Between PhD Loans and Other Student Loans
PhD loans are specifically designed for students who are currently working on their doctoral thesis. Unlike other student loans for graduate and undergraduate students, PhD loans have unique features. The loan amount can vary, but the stipend provided to PhD students remains consistent to help them make repayments.
The maximum funding amounts are as follows: £28,673 for courses starting on or after 1 August 2023, £27,892 for courses starting between 1 August 2022 and 31 July 2023, and £27,265 for courses starting between 1 August 2021 and 31 July 2022.
Eligibility Criteria
The eligibility criteria for doctoral loans in the UK include being a UK resident for at least three years before the start of the course, not being in arrears on any existing student loans, and not receiving funding from any other source. Apart from these general criteria, there are other specific requirements that applicants must meet in order to qualify for a UK PhD loan. These include:
- The course in question needs to meet specific criteria in order to be considered. It must be a comprehensive doctoral course, initiated after August 1, 2018, and lasting a duration of 3 to 8 academic years. Additionally, it must be offered by a UK university with the authority to award research degrees.
- If you are pursuing a doctoral program that includes a combined master’s degree, you are eligible to apply for a loan, even if you already have a master’s degree.
- To be eligible for a Postgraduate Doctoral Loan for online education, you must be a resident of England at the beginning of the first academic year of your program. Additionally, you must reside in either England for the entire duration of the course if you are an EU national, or the UK for the entire duration of the course if you are not an EU national.
- You need to be less than 60 years old at the beginning of the first academic year of your course. The academic year lasts for 12 months and begins on September 1st if your course starts between August 1st and December 31st; January 1st if your course starts between January 1st and March 31st; April 1st if your course starts between April 1st and June 30th; or July 1st if your course starts between July 1st and July 31st.
- If you meet the following criteria, you are eligible to apply for the Postgraduate Doctoral Loan: you are a UK national, Irish citizen, have settled status under the EU Settlement Scheme, or indefinite leave to remain, without restrictions on the length of stay; you typically reside in England; and you have lived in the UK, the Channel Islands, or the Isle of Man for at least 3 consecutive years before the start of your academic course, excluding temporary absences.
For more details on the UK PhD loan application eligibility criteria, you can visit the official website
Related: Opening a UK Bank Account: A PhD Student Guide
How to Prepare for Your PhD Loan Application
PhD students in the UK are able to apply for student loans to help cover some of the costs associated with their studies. These loans are non-income assessed, meaning the amount awarded is not dependent on the student or family’s financial situation. The loan assistance available for PhD students usually covers the cost of tuition as well as provides a stipend for living expenses.
Although applying for a loan can seem daunting, there are several steps you can take to prepare for the PhD loan application process. We have put together a quick checklist of things to sort out before you start the application for PhD loan. By executing these steps, you can ensure the process runs as smoothly as possible and that you receive the loan support you need to help finance your studies.
1. Check Eligibility Requirements
It is important to thoroughly review the eligibility requirements for the UK PhD Loan before starting the application process. This will ensure that you meet all necessary criteria and understand what is required to avoid potential issues later on. Familiarizing yourself with the eligibility requirements will ultimately save time and effort. See the summary of the full eligibility criteria above.
Generally, the requirements demand that you must be a resident of England and Wales (or an EU student studying there), starting a new PhD without Research Council funding lasting between three and eight years at a UK university, and be aged 60 or under at the start of your first academic year. Meeting all the eligibility requirements before applying is crucial, as failure to do so may result in rejection of your application and delay in funding for your PhD.
2. Understand Research Council funding Rules.
Most research councils only provide funding for UK and in some cases, EU nationals, but this funding does not cover all fees and living costs. Each research council has specific funding rules, which can be found on their website. It is advised to carefully review the information and instructions presented on these online resources, with a specific focus on the qualifications required and the specific courses that qualify for financial support. It should be noted that doctoral loans cannot be used in conjunction with Research Council scholarships.
See: 10 Cheapest Cities in the UK for PhD Students
Individuals who have previously received Research Council funding for their PhD studies or are expecting to receive it in the future are not eligible for a doctoral loan. The application for the doctoral loan requires you to indicate whether you anticipate receiving Research Council funding for your PhD. If you confirm that you will receive such funding, you will not be eligible for the loan. In cases of uncertainty about potential Research Council funding, you may initially respond with a ‘no’ on the application. However, if you eventually secure a studentship, you must then withdraw your application for the doctoral loan.
3. Confirm Your PhD Details
Before commencing your application for a loan, it is imperative to verify the details of your PhD. It is essential to ensure the accuracy of all information about your doctorate. This includes knowing the precise title of your PhD, as well as the commencement and anticipated completion dates of your studies. Furthermore, be aware of the duration of your research on a full-time basis. The application process will necessitate information regarding the institution where your doctoral studies will be conducted and the estimated timeframe for completion.
This confirmation establishes your eligibility and assists in establishing the repayment schedule for your loan. It is noteworthy that having been formally accepted into a PhD program is not necessary at this stage. All that is required is to designate the university where you intend to pursue your studies (with the option of modifying this selection at a later stage). The university you have chosen to attend should be equipped to corroborate and validate the details of your PhD. Be prepared to provide information about your research plans and intended use of the loan when prompted by a potential lender.
Read Also: Cheapest Universities in the UK to Study a PhD
4. Get Your Documents Ready
There will be a pile of documents that you have to submit to the loan officer with your loan application to ensure you have the best chance of being approved for a PhD loan. Being prepared ahead of time can help expedite the process, which is especially helpful when you are juggling a million different things while working on your PhD.
- First, you need to submit personal identification documents like a copy of your driver’s license, your passport, or your state-issued identification card. You also need to submit proof of your current address, which can usually be satisfied by providing a copy of a utility bill in your name. You will also need to submit your Social Security card and your most recent Social Security statement.
- Second, you need to submit documents related to your PhD program. This includes a copy of your letter of admission to the program, as well as a copy of the program’s degree requirements.
- Third, you need to submit financial documents. This includes a copy of your most recent tax return, your most recent W-2 form, and your two most recent pay stubs. If you own a business, you will need to submit a copy of your business’s most recent tax return as well.
- Finally, you need to submit documents related to your employment. If you are employed, this includes a copy of your most recent job offer letter, as well as a recent pay stub. If you are self-employed, you will need to submit a copy of your most recent profit and loss statement.
5. Note How Much Loan you Need
Before requesting a loan, it is essential to have a clear understanding of the amount of money needed and the maximum amount you can realistically borrow. Take the time to calculate all expenses for the entire duration of your PhD program, factoring in the interest that will accrue on the loan. Once you have a rough estimate of the total needed, you can begin the process of researching and applying for the loan.
For courses starting on or after 1 August 2023, the maximum funding amount is £28,673, and for courses starting between 1 August 2022 and 31 July 2023, it is £27,892. For courses starting between 1 August 2021 and 31 July 2022, the maximum funding amount is £27,265. It is important to carefully consider your actual financial needs before applying, especially if you anticipate other funding sources and want to minimize your student loan debt. Keep in mind that you can always adjust the loan amount later if necessary.
Compare: Getting a PhD in the UK vs Getting a PhD in the USA
6. Residency/Address History
The duration and location of your previous addresses and residency are essential for the loan application process to be efficient. To prevent potential delays, it is crucial to provide precise and thorough residency and address history. Before submitting, it is advisable to review all information to ensure accuracy, which can aid in streamlining the process. The eligibility criteria for PhD loans significantly consider residency, and the application system will verify this information.
Typically, two key details are requested: the country where you plan to reside at the start of the first academic year of your PhD and your permanent home address for the three years leading up to that date, excluding temporary accommodation like student housing or residency halls.
Repayment Plans and Conditions
Doctoral loans differ from other student loans, such as undergraduate or taught postgraduate loans, in the way that they are repaid. Repayment doesn’t commence until after you’ve completed the course and are earning over the repayment threshold. In addition, repayment isn’t sought for the total loan amount, only once the respective plan-based monthly repayments have resulted in satisfying the loan within a certain term.
It is crucial to be aware of the repayment thresholds and the percentage amount over each threshold level that you will have to repay. This information will allow you to make an educated decision on whether you can afford to accept the loan and will also prepare you for budgeting your future income, preparing for life changes, and protecting your credit score. Before submitting your loan application, you should become acquainted with the repayment conditions and terms to ensure that you understand how repayment works, what is required of you, and what will happen after you’ve completed your course.
When and How to Start Repaying Your Loan
You’ll only repay your student loan when your income is over the threshold amount for your repayment plan, unless you’ve been overpaid.
Your income is the amount you earn (including things like bonuses and overtime) before tax and other deductions.
- The threshold amounts change on 6 April every year.
- The earliest you’ll start repaying is:
- the April after you leave your course
- the April 4 years after the course started if you’re studying part-time or doing a Postgraduate Doctoral course and your course is longer than 4 years
- April 2026 if you’re on Plan 5
Your repayments automatically stop if either:
- you stop working your income goes below the threshold
You’ll make a repayment if your income goes over the weekly or monthly threshold for your plan (for example, if you’re paid a bonus or overtime). You can ask for a refund at the end of the tax year if your annual income is less than the yearly threshold for your plan.
Check Out: 11 In-Demand Life Skills for PhD Menial Jobs in UK
Interest Rates and How They Are Calculated
A loan’s interest rate is critical in determining how much it will cost you. Interest rates can either be fixed or variable. Fixed interest rates stay the same and won’t change throughout the loan term. Variable interest rates, although often cheaper in the short term, can fluctuate up or down, causing your monthly repayments to go up or down.
The downside to variable interest rates is that you are completely at the mercy of the market – if rates increase, your repayments will too. Interest rates can vary greatly. This is where you need to do your homework and shop around for the best deal. Your credit rating can also affect the interest rate you are offered, so this is another reason to check it is accurate and in good health – a poor credit rating can mean that the interest rate offered to you will be higher.
Repayment Thresholds and Monthly Payments
· If you have a Plan 1 student loan
You’ll only repay when your income is over £480 a week, £2,082 a month or £24,990 a year.
· If you have a Plan 2 student loan
You’ll only repay when your income is over £524 a week, £2,274 a month or £27,295 a year.
· If you have a Plan 4 student loan
You’ll only repay when your income is over £603 a week, £2,616 a month or £31,395 a year.
· If you have a Plan 5 student loan
You’ll only repay when your income is over £480 a week, £2,083 a month or £25,000 a year.
· If you’re on a Postgraduate Loan repayment plan
If you took out a Master’s Loan or a Doctoral Loan, you’ll only repay when your income is over £403 a week, £1,750 a month, or £21,000 a year.
Conclusion
Preparing for a loan application can be a daunting task, but with the right preparation, it can be a smooth process. Make sure you gather all the information you need, fill out the application carefully, and submit it well before the deadline. With these steps, you can increase your chances of being approved for a PhD loan and can start focusing on your studies without having to worry about your finances.
