A Cranfield University postgraduate student loan scheme is to offer lower interest rates and more flexible terms than some existing finance options.
The Cranfield Postgraduate Loan Scheme, jointly funded by the institution and the Higher Education Funding Council for England, will offer loans to up to 200 students in the first two years, and will provide lower interest rates and more flexible terms than current Career Development Loans.
It will fund master’s students taking STEM (science, technology, engineering and mathematics) courses, and is open to UK and EU-domiciled students.
Cranfield is also seeking industry donors to grow the scheme, and will reinvest student loan repayments in a bid to make the programme self-sustaining.
Successful students will be charged interest set at 5.6 per cent above the Libor (London Interbank Offered Rate), which is the average interest rate that London’s leading banks would be charged if borrowing from other banks.
Currently, that would mean an interest rate of around 6.3 per cent, more than 3 per cent lower than the 9.9 per cent paid by students repaying CDLs.
In addition, students accessing the Cranfield scheme, which is to be administered by private loans company Prodigy Finance, will be able to borrow up to £15,000, which is £5,000 more than the maximum CDL, and will have seven years to repay what they have borrowed (compared to CDL’s five).
CPLS students will only have to begin repaying their loan six months after graduation, compared to one month for those with CDLs.
Speaking to Times Higher Education earlier this year, Cranfield vice-chancellor Sir Peter Gregson said the scheme was all about “making sure that postgraduate education doesn’t just become an opportunity for the privileged”.
“The [government’s] new framework for the funding of higher education really addressed undergraduates only – and actually only full-time undergraduates – so there are certain ‘second cousins’ in higher education,” he said. “One is the whole part-time arena, and the other is the postgraduate arena.”
Prodigy Finance has also announced that it will manage loans available to new MBA and master’s in finance entrants at Cambridge University’s Judge Business School.
It says the loans will offer students who otherwise would not have the opportunity to fund a business education the chance to study at Judge. Only candidates considering full-time courses are eligible to apply.