If you are going to study at university or a higher education college in England or Wales, there are two loans available from the Government’s Student Loans Company (SLC) – one to cover tuition fees and one to cover living costs.

How much can I borrow?

Universities can charge maximum tuition fees of £3,145 a year and all students are eligible to borrow 100 per cent of what their university charges. This is paid by the SLC direct to the university on behalf of the student.

How much you can borrow with the maintenance loan depends on where you live and your household income (or that of your parents or partner). Everyone on an eligible course qualifies for 75 per cent of the maximum loan, regardless of income. The remainder is income-assessed.

The maximum amount that you can borrow if you live outside London and away from home is £4,625. This amount increases to £6,475 if you live in London.

If you are not eligible for the 25 per cent part that is means tested, these figures decrease to £3,470 and £4,885 respectively.

If you are studying but still live at home, you are entitled to a maximum of £3,580, or £2,685 if you are not eligible for the means-tested element.

How is it paid?

Your loan is usually paid in three instalments, one at the start of each term, directly into your bank account. You will receive a letter explaining what amounts will be paid and when.

How do I repay the loan?

Interest rates are set every year on September 1 according to what the retail prices index was the previous March. The rate is currently 1.5 per cent. From September 2009, it will be 0 per cent.

Loans start to be repaid automatically from your pay packet after you graduate and start earning more than £15,000 a year or £1,250 a month. You will automatically be charged 9 per cent of all earnings over this amount. For example, if you earn £1,500 a month, that is £250 over the repayment threshold, so repayments will be 9 per cent of £250, which is £22 a month.

Your employer will deduct this amount from your pay packet, along with tax, and send it to HM Revenue & Customs at the end of the tax year. The Revenue then forwards details of the repayment to the SLC, which updates your payment file and sends you a new annual statement.

As soon as you start earning more than £15,000 a year, you should tell your employer that student loan repayment deductions need to be made from your pay packet. If somebody has been earning more than the threshold and not repaying the loan, then they will not be asked to make a consolidated backpayment.

If you are self-employed, or a combination of employed and self-employed, you will be responsible for calculating and making your own repayments on your self-assessment tax return. If you work overseas, you will be required to make a repayment arrangement with the SLC.

You can also make additional loan repayments by paying the SLC directly, whether or not your income is above the repayment threshold.

A spokesman for the SLC says: "If at any point somebody wishes to repay their student loan in full, either in one lump sum or by making regular monthly repayments, then they are more than welcome to do so. We accept credit cards, debit cards, cheques, standing orders, direct debits and electronic funds transfers (through phone/internet banking). There is no penalty for repaying your loan early."

Contact the SLC's repayment helpline on 0870 2406298 for more information.

Who is eligible for a student loan?

Anyone who has been resident in the UK for the past three years and is studying full-time at a university or higher education college. You are not eligible for a student loan if you are a postgraduate student (except postgraduate courses of initial teacher training) or if you study part-time.

Is it possible to overpay my student loan?

Yes. Thousands of graduates overpay their student loans every year before the SLC reviews their payments at the end of each tax year. Graduates have reported waiting months for a refund.

To avoid this happening, it is important to keep a close eye on your pay deductions as you are approaching the end of your repayment, and notify the SLC three months before the last instalment is due. Remember that you will only receive your balance statement once a year - so if you think that your loan may be repaid in full over the next year, contact SLC.

How do I apply?

Students can apply for loans online at the Student Finance Direct website.

Is there any other financial support available?

You may be able to get a bursary or scholarship from your place of study, on top of your student loan. These do not have to be paid back. Ask your university or college what is on offer. If you think that you may qualify, you should apply as soon as you have a confirmed place on your course.

Some universities and colleges administer their own bursaries and scholarships. For others, Student Finance Direct handles applications. Search for your university or college on the UCAS website to find out where to apply.

On the main application for student finance, Student Finance Direct asks for permission to share your application details with your university or college if necessary. If you consent, the college should assess what you may claim. If you do not consent, you will have to give your details to the college yourself.

If you are in hardship and need extra financial support during your studies, universities and colleges in England can provide help through their Access to Learning Funds. Contact your university's student finance officer for more information.

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Five websites

DirectGov

Student Finance Direct

Student Loans Company

UCAS

Uni Money