How do people pay for university courses and what about their living costs?
To cover the costs of higher education in England, there are two types of student loan available: a tuition fee loan and a maintenance loan.
Tuition fee loans are there to cover the cost of the course. Currently, universities and colleges are able to charge up to a maximum of £9,250 per year for a typical full-time higher education course. Anyone who meets the eligibility criteria can apply for a tuition fee loan to cover the cost of their course. Whatever amount is being charged for the course is the amount that you would apply for.
Maintenance loans are available to help with the everyday costs of living, for example: accommodation, food, utility bills and socialising etc.
For maintenance loans, the amount you can borrow depends on your family’s household income and whether you’ll be studying inside or outside of London*. If you’ll be living away from home (and outside of London), a maintenance loan of up to £9,488 per year is available for households earning £25,000 per year or less.
*If you’re going to university in London, the maximum loan amount available is £12,382. This is to account for the higher cost of living in the capital.
If the household income is more than £25,000, the amount you will be eligible for will be lower. Due to the higher household income, it is expected that parents or carers will help. Another option that many students choose is to work part-time.
How much can you borrow?
Who can apply for these loans?
Generally speaking, if you’re a UK national, or have ‘settled status’ in the UK, you can apply for tuition fee loans and/or maintenance loans. For specific eligibility criteria, we recommend checking out this page: Student Finance – Who Qualifies?
For most courses, applications should be made by the end of May in the year that the course will begin; however, it is possible to apply for a loan up to nine months after the course start date.
You will be required to provide a ‘Current Year Income assessment’, Student Finance England have updated their process in light of COVID-19 (this also applies if: your parent or partner has retired or got a different job), so if you expect your household income to drop by 15% or more compared to the tax year we’d normally use, you can ask us to calculate their student finance based on your estimated income for the current tax year instead. Find out more here.
Watch: Student Finance explained or listen to our HE Knowledge Hub Podcast: Ep 1 – Student Finance, where we talk to someone from the Student Loans Company England.
How and when does it get paid back?
When it comes to repaying these loans, both are added together (that’s if you’ve borrowed both). Repayments start in the April after you have finished your studies and when you are earning over a certain amount. The threshold currently stands at £27,295.
Repayments are not linked to how much was borrowed, they are based on how much you earn:
- If you earn under the threshold, you don’t repay anything until you’re earning above it.
- If you never earn above the threshold, you’ll never pay anything.
- If you do earn over the threshold, you’ll repay 9% of whatever you earn over it.
After 30 years, whatever amount is outstanding gets written off. In fact, it’s been highlighted that around 60% of graduates won’t have paid their full loan back after 30 years.
How much are monthly repayments?
The table below shows approximate monthly repayments for a range of salaries at the current threshold of £27,295.
*Click to enlarge. Note that figures are approximate and may be subject to change.
How does interest work on student loans?
Like the repayments, interest is linked to how much you earn, but it doesn’t change the amount you repay each month. This article by Martin Lewis (from last year) explains the topic of student loan interest really well.
Financial support for eligible students
There’s a range of financial support for eligible students. Use the links below to find out more:
- Hardships funds
- Disabled Students’ Allowance
- Bursaries and Scholarships
- Learning Support Fund for NHS Students