Doctoral Loans: Worth The Debt?

Doctoral loans are a type of funding offered by governments to support students pursuing postgraduate doctoral degrees, such as PhDs. They are typically intended to cover course fees, living expenses, research costs, and other related expenses. While doctoral loans can provide financial assistance to students, there are important considerations to make when deciding if taking out a loan is worth it. This includes understanding eligibility criteria, repayment terms, interest rates, and exploring alternative funding options.

Interest rates and repayment terms

Repayments on doctoral loans are income-contingent, meaning that you only start repaying the loan when your income is over a certain threshold. In the UK, this threshold is £21,000 per year, or £1,750 per month. You will then repay 6% of your income above this threshold. For example, if you earn £3750 pre-tax per month, you will pay £120 per month towards your doctoral loan. It is worth noting that you will not be required to fully pay off the loan if you do not earn enough to meet the threshold. Additionally, the loan will be wiped after 30 years.

The repayment process for doctoral loans is similar to that of undergraduate and master's loans. Repayments are typically deducted directly from your wages, along with tax and National Insurance contributions. Repayments will begin in the April after you finish your doctoral programme, and you will receive a yearly statement outlining the interest details and any payments made. It is important to note that if you are already repaying undergraduate or master's loans, your doctoral loan repayments will be in addition to these.

While doctoral loans can provide much-needed financial support, it is essential to carefully consider the interest rates and repayment terms before making a decision. The high-interest rates on doctoral loans can lead to significant costs over time, and borrowers should be aware of the potential long-term financial commitment. However, the income-contingent nature of the repayments means that you will only pay back the loan when you are able to, and the monthly repayments are designed to be manageable.

Eligibility criteria

Eligibility for a doctoral loan depends on several factors, including citizenship, residency, age, and previous educational qualifications. Here are the detailed criteria for the Postgraduate Doctoral Loan:

Citizenship and Residency:

• You must be a UK national, an Irish citizen, or have settled status under the EU Settlement Scheme or indefinite leave to remain, with no restrictions on how long you can stay.
• You should have been living in the UK, the Channel Islands, or the Isle of Man for three consecutive years before the first day of the first academic year of your course. Temporary absences, such as holidays, are permitted.
• If you have been living in Ireland or a British overseas territory, you are exempt from the requirement to usually live in England.
• You might also be eligible if you are a UK national (or a family member of a UK national) and have resided in the UK, the EU, Gibraltar, Switzerland, Norway, Iceland, or Liechtenstein for the last three years.
• Additionally, specific residency criteria apply if you are not a UK national: you must be under 18 and have lived in the UK for at least seven years, or be 18 or over and have lived in the UK for at least 20 years (or at least half of your life).

Other Criteria:

• You must not already have a doctoral degree or an equivalent or higher qualification.
• You should not be receiving funding from another source, such as Research Council Funding (studentships, stipends, scholarships), a Social Work Bursary, or an NHS bursary. Even if you are eligible for an NHS Bursary but not receiving it, you are ineligible for the Doctoral Loan.
• You should not have received a Postgraduate Doctoral Loan before, unless you left your previous course due to illness, bereavement, or other serious personal reasons.
• Your course must be a full, standalone doctoral course, not a top-up course, and it must include a full doctoral degree.
• If your course includes an integrated master's degree, you can still apply, even if you already have a master's degree.
• If your doctoral programme is delivered by multiple universities and one is overseas, you are still eligible as long as you meet the other criteria.
• For distance learning, you must be living in England on the first day of the first academic year of your course.
• You must not be behind on repayments for any previous student loans.

It is important to note that eligibility criteria may vary depending on your specific circumstances and the loan provider's requirements. Therefore, it is always advisable to refer to the official sources and loan providers for the most up-to-date and accurate information regarding eligibility.

Alternative funding options

Doctoral loans are a popular way to fund your PhD, but they are not the only option. Here are some alternative funding options to consider:

• Studentships, scholarships, and bursaries: Universities, colleges, and research institutes often offer these to their students. They can be merit-based, means-based, or awarded based on other criteria. For example, the British Federation of Women Graduates awards scholarships based on gender. You can find information about these opportunities on the websites of the institutions you are interested in applying to.
• Funding bodies: There are several funding bodies that support PhD students, such as the seven Research Councils in the UK, which invest around £380 million into doctoral research every year. Funding is typically made available through participating universities, which set up Doctoral Training Partnerships (DTPs) or Centres for Doctoral Training (CDTs) to receive this funding.
• Charities, foundations, and trusts: Organisations like the Grundy Educational Trust provide funding for postgraduate research. The Alternative Guide to Postgraduate Funding is an online resource that can help you find and apply for funding from charities.
• Part-time work: You could consider studying part-time while working, although this may place additional demands on your time and finances. It is important to note that some funding awards may prohibit you from working during your PhD.
• External funding bodies: You can also look into external funding bodies or institutions, such as libraries and archives, to help fund your studies.
• University prizes: Check if your university offers topic-specific prizes or awards that you might be eligible for.
• Collaborations with non-academic organisations: Some PhDs are part-funded by non-academic organisations, such as UK industrial firms or public sector organisations. These are known as Cooperative Awards in Science and Engineering (CASE) studentships, and they provide an opportunity for students to gain hands-on work experience and potentially find full-time employment after their PhD.

Doctoral loan vs. other loans

Doctoral loans are specifically designed for students pursuing a doctoral degree, such as a PhD. They are offered by governments and private lenders to help students cover the costs of their doctoral studies. While doctoral loans can provide much-needed financial support, it is essential to understand how they differ from other types of loans and make an informed decision about taking one out.

One key difference between doctoral loans and other loans, such as undergraduate or graduate loans, is the eligibility criteria. Doctoral loans often have more specific requirements that must be met to qualify. For example, the student must be enrolled in a full, standalone doctoral course, not a top-up course, and the course must last between three and eight academic years. Additionally, doctoral loans may not be available to students who are already receiving funding from other sources, such as scholarships or research grants.

In terms of interest rates, doctoral loans may have higher rates compared to undergraduate loans but lower rates than Grad PLUS loans. For example, in the UK, doctoral loans have an interest rate of 8%, which is higher than the typical interest rates for undergraduate loans. On the other hand, private loans may offer lower interest rates than Grad PLUS loans if keeping rates low is a priority for the borrower.

Another difference to consider is the repayment structure. Doctoral loans are typically designed with the understanding that students may not have a steady income during their studies. Therefore, repayment plans for doctoral loans are often more flexible, with repayments increasing as the borrower's salary increases. In contrast, other types of loans may have fixed repayment amounts or less flexible terms. It is worth noting that, similar to other loans, the government maintains the right to change the repayment terms of doctoral loans, including interest rates and debt write-off periods.

Lastly, doctoral loans provide a sense of autonomy and control over one's PhD journey. Many funding bodies come with specific criteria, events, and deadlines that students must adhere to. However, with a self-funded doctoral loan, students have the freedom to direct their studies with minimal external influence. This flexibility can be advantageous for students who wish to have more agency in their research and academic pursuits.

Doctoral loan impact on studies

Doctoral loans can have a significant impact on studies, both positively and negatively. On the one hand, they can provide much-needed financial support for students pursuing their doctoral degrees, allowing them to cover expenses such as course fees, living costs, travel, conference fees, books, and equipment. This can reduce financial stress and enable students to focus more on their studies.

One of the advantages of doctoral loans is that they are income-contingent. Repayments are made based on a percentage of the borrower's income above a certain threshold, and if their income falls below the threshold, they won't have to make any repayments until their income increases again. This provides some flexibility and reduces the immediate financial burden on students, especially if they are not earning a high salary after completing their degree.

However, there are also potential drawbacks to consider. Doctoral loans typically have high interest rates, which can lead to students accumulating significant debt over time. The interest accrues from the day the first payment is received, and while the monthly repayments are manageable, the total amount repaid over the loan's lifetime can be substantial. This can cause financial strain and impact a student's long-term financial goals, such as saving for a house deposit or retirement.

Additionally, doctoral loans may come with certain restrictions or eligibility criteria that can influence a student's studies. For example, students receiving other forms of funding, such as scholarships or stipends, may not be eligible for a doctoral loan. There are also requirements regarding the duration and nature of the doctoral course, and part-time students may have their loan split over more years, potentially impacting their financial situation.

Overall, while doctoral loans can provide financial support and flexibility for students, it is important to carefully consider the potential impact on their studies and long-term financial health. The decision to take out a doctoral loan should be made after thorough research and consideration of individual circumstances.

Frequently asked questions