Although apprenticeships as we know them now have been around since the early 90s, there is still much misinformation about how they are structured and how they differ to university students in terms of financial rights. As someone who has gone through the process of applying for apprenticeships after only being familiar with the traditional university application process, I understand that it can be confusing to navigate what you would be entitled to as an apprentice. This article, however, will cover the key financial aspects of an apprenticeship and help you gain an understanding of apprentice student loan eligibility.
In short, becoming an apprentice, specifically at the degree level, makes you ineligible for any student loans. This is mainly due to the fact that the employer is responsible for taking on the university tuition fees. Degree apprentices get their degrees for free and so a student loan, reserved for university students to pay for university, is not required. The free degree coupled with the fact that an apprentice gets a salary that they will use to support themselves (e.g. rent and food) are why apprentices cannot get student loans.
Now that you know apprentices cannot get student loans, read on to get a better understanding of apprenticeship structure from a financial perspective.
Why can’t an apprentice get a student loan?
Degree apprenticeships are an alternative to university that has the added benefit of a free degree. As part of an apprenticeship, you will be required to carry out a set amount of “On The Job” training which will make up 80% of your program. The other 20% will consist of work that you do to gain the qualification you are working towards.
One of the biggest draws towards apprenticeships for a lot of people is the ability to earn money while learning. This is achieved through a salary being paid to the apprentice by their employer (i.e., the person or people providing the 80% on the job training).
One of the assumptions about apprenticeships is that they are often low paying, and this unfortunately sometimes is true. The minimum wage for an apprenticeship is £4.81 per hour, as stated on the government website found here. This is lower than the national minimum wage of £6.83 for 18- to 20-year-olds. Some employers take advantage of this and offer incredibly low wages to attract desperate people, rendering the opportunity out of reach for people who have bills to pay.
Due to these low wages, it might make sense that a student loan be offered to these apprentices who want the opportunity, but also have unavoidable expenses such as rent and food, that cannot solely be covered by the wage on its own. However, as unreasonable as these salaries might get, a student loan for tuition fees is not offered because the apprentice is not required to take on the cost of the degree.
The onus is on the employer to finance the degree (i.e., the other 20% of the program) so that the apprentice can get the qualification they applied for. This is also an aspect that differentiates a degree apprentice and someone who is working full time while studying a related degree separately. The former gets the degree for free while the latter would have to pay for it, thus entitled to a loan.
Can apprentices get a maintenance loan?
Those of you who are more familiar with the student loan system may be confused as to why maintenance loans are not offered to apprentices. For the people who don’t know, student loans can be split into two categories, a maintenance loan and tuition fee loan. The tuition fee loan is used to cover the fee charged by the university to study there and this what is covered by employers if you choose to do a degree apprenticeship. The maintenance loan is used to cover living costs while you study your degree. These are just basic definitions. More detail can be found in this Think Student article and this page on the government website.
The reason why even maintenance loans are not offered to apprentices is because of the salary which should cover living costs. Although there are many university students who have jobs and yet still are eligible for a maintenance loan, not all students work and an apprentice wage should be enough to live on.
Whether or not you deem your salary to be enough for you to live comfortably will depend on many factors including your lifestyle, living arrangements and expenses. The salary is definitely something to consider when wondering if an apprenticeship is right for you, especially now with the knowledge that a student loan is off the table.
How much does it cost to be an apprentice?
Applying for and doing an apprenticeship technically comes at no cost to the apprentice. As previously stated, the degree is paid for and you receive a salary along with it. However, naturally, life comes with expenses that you have to take into consideration.
This is likely going to apply more for apprentices who have to pay rent, car expenses or other regular costs. These types of costs are going to have to be considered when applying for an apprenticeship.
Some people would argue that the valuable experience gained from an apprenticeship far outweighs the importance of salary. However, if you are being paid a wage you can’t live on, your ability to take advantage of the experience will be negatively impacted.
Learning how to budget is going to be your best asset if you’re going to be living pay check to pay check, as many of those on low apprenticeship salaries do. Check out this article for great budgeting ideas and tips on saving money.
Are apprentices entitled to any financial help?
One thing that both degree apprentices and university students are entitled to is an NUS (National Union of Students) card. This will allow you to get discounts at hundreds of stores and online brands which can be extremely helpful when on a tight budget. For apprentices, it is called the NUS Apprentice extra card and you can find out more about it here on the Apprentice Extra website. You’ll find out how to apply for one and which stores it is compatible with.
Some employers also offer perks that take a bit of pressure off of you. Examples of these could be key resources required or travel costs. If your apprenticeship requires you to travel regularly, your employer may reimburse the money you spent to get to and from the destination. Additionally, if you are required to stay overnight at a location away from your home or base location, the employer will likely cover accommodation and food for you during this time.
With working from home becoming a more and more common option in the workplace, there is a high chance your apprenticeship will take place at home as well. Because of this, certain employers provide home office equipment to ensure the apprentice is able to work to the best of their ability. This is usually done in the form of a work laptop.
Despite the perks, it is best to assume that your employer is offering none of these unless explicitly stated. This is particularly important when budgeting. You should work out if you would be able to afford working for them based on that. This will help you avoid possible disappointment in the future and ensure you are prepared for a scenario where you have no extra help from the employer.
How do you apply for a student loan?
If you want to be on the safe side, it might be a good idea to apply both to university and degree apprenticeships simultaneously. As taxing as it can be, it provides a layer of security in case you don’t get onto a degree apprenticeship or into university.
Sometimes companies have long application processes or take a long while to get back with offers or rejections. With this in mind, it is important to consider applying for student loans just in case you are left waiting too long for a response only to get rejected and then having to apply for loans late.
Luckily, the process of getting a student loan is fairly simple. The government website has a comprehensive guide on the entire process which you can find here. You can also check this Think Student article. There is quite a bit of personal information required to complete your application, so try to ensure these are readily available so things go as smoothly as possible. This will include things such as household income, which they use to calculate how much maintenance loan you are entitled to, and proof of identity.
Cancelling your student loan application requires contacting Student Finance directly and informing them of your situation. As long as none of the money has entered your account, you will not have to pay anything back. It would just be a case of waiting for your application to be closed.