University Student Loans: Understanding The Basics

University student loans are a combination of a loan for tuition fees and a maintenance loan for living costs. The details of these loans depend on where in the UK you live, but they are typically split into two parts: a tuition fee loan to cover the cost of your studies and a maintenance loan to help with the cost of living while studying. Tuition fees vary depending on where you are from and where you are studying. For example, if you are from England, you will pay up to £9,250 no matter where you study in the UK. The loan is paid directly to your university or college, so you don't need to worry about it until it comes time to repay it. The maintenance loan is paid directly into your bank account in instalments at the start of each term. The amount you can borrow depends on several factors, including where you live and study, and your household income. You will need to repay your student loans once you have graduated and started earning above a certain threshold.

Tuition fees

In the UK, tuition fees are typically made up of a loan for tuition fees and a maintenance loan for living costs. Most people are entitled to the tuition fee element, which is equal to the annual cost of the course. From August 2025, the cost of an undergraduate degree in England and Wales will rise from £9,250 to £9,535 per year.

• Lectures, seminars, and tutorials
• Access to course-related facilities and equipment (e.g. laboratories, studios)
• Access to campus libraries and computer rooms
• Support services for students
• Student union membership
• Field trips essential for completion of the course (travel and accommodation only)

However, tuition fees usually do not cover:

• Printing or photocopying at libraries or IT facilities
• Non-compulsory field trips
• Textbooks and other course materials, e.g. art supplies, dancewear
• Personal technology, e.g. laptops, tablets, specialist software, cameras, and accessories
• Membership to union clubs and societies
• Travel costs to work placements
• Professional body membership
• Living costs e.g. accommodation, travel
• Graduation attire, photography, and guest tickets

If a student is unsure whether something is covered by their tuition fees, they should ask their university or college.

• Students from England pay up to £9,250 no matter where they study in the UK
• Students from Scotland pay nothing to study in Scotland but will pay up to £9,250 in the rest of the UK
• Welsh students pay up to £9,250
• Northern Irish students pay up to £4,750 in Northern Ireland and up to £9,250 in England, Scotland, and Wales

For the 2025-2026 academic year, the maximum tuition fees that universities and colleges in England can charge will increase from £9,275 to £9,535.

Maintenance loans

In England, students can borrow up to £9,250 per year in tuition fee loans, which are paid directly to the university or college. On top of this, maintenance loans are available to help with living expenses such as accommodation, food, and transport. The amount of maintenance loan available depends on where the student lives and studies, and their household income. For example, in the 2024/25 academic year, students living away from home and studying in London can receive up to £13,348, while those living at home outside London can receive up to £3,790.

To be eligible for a maintenance loan, students must be studying at a recognised or listed college or university on a full-time course. They must also be a UK national or have settled status and have lived in the UK for at least three years before starting their studies. Additionally, maintenance loans are usually only available for a student's first undergraduate degree, and the length of the loan is the duration of the course plus one year. This provides flexibility in case a student needs to retake a year or drops out.

Repayments for maintenance loans are bundled with tuition fee loans and are only required once a student's income is over a certain threshold. In England, the threshold is £25,000 per year, and repayments are 9% of everything earned over this amount. Repayments are automatically deducted from a student's salary by their employer, and loans are written off after a certain period, typically between 25 and 40 years depending on the country and when the student began their studies.

Eligibility criteria

United States

Eligibility for student loans in the US depends on whether one is applying for federal or private student loans. For federal student loans, the borrower must:

• File the Free Application for Federal Student Aid (FAFSA)
• Be enrolled for at least half of the time
• Be a US citizen, permanent resident, or eligible non-citizen
• Have a high school diploma or equivalent
• Maintain satisfactory academic progress with a minimum GPA
• Not be in default on a federal education loan

For Federal Parent PLUS loans, the student must satisfy the citizenship criteria, and the borrower must have a good credit history.

Eligibility for private student loans, on the other hand, typically requires the borrower to be creditworthy or have a creditworthy cosigner. The borrower must also satisfy citizenship requirements, and most lenders require the student to be enrolled at least half-time.

United Kingdom

To be eligible for student finance in the UK, one must meet the university, course, and age requirements. Additionally, the individual's home must be in England, and they must have been continuously living in the UK, Channel Islands, or Isle of Man for three years before the first day of their first academic year.

New Zealand

To be eligible for a student loan or allowance in New Zealand, one must be a New Zealand citizen or ordinarily resident in the country. For those who are not citizens, they must have lived in New Zealand for at least three years and held a residence class visa during that time. Alternatively, they can be a refugee or sponsored into the country by a family member who is a refugee or protected person.

Repayment plans

Standard Repayment Plan

The standard repayment plan is a straightforward option where borrowers make equal monthly payments over a fixed period, typically 10 years. This plan is generally the best option for those who can afford it as it minimises the total interest paid over time. Borrowers are often automatically placed on this plan when they enter repayment. While it may result in higher monthly payments compared to other plans, it allows for faster debt repayment and lower overall interest costs.

Income-Driven Repayment (IDR) Plan

The income-driven repayment plan is ideal for those with lower incomes who may struggle to meet the standard repayment amounts. This plan ties monthly payments to a percentage of the borrower's discretionary income, typically ranging from 10% to 20%. Payments can be as low as $0 for the unemployed or underemployed, and they are adjusted annually based on income changes. IDR plans usually extend the repayment period to 20 or 25 years, after which any remaining debt is forgiven. However, borrowers may have to pay taxes on the forgiven amount.

There are several types of IDR plans, including income-based repayment, income-contingent repayment, Pay As You Earn (PAYE), and Saving on a Valuable Education (SAVE). The Education Department is also working on a new IDR plan that would halve payments and forgive debt after 10 years.

Graduated Repayment Plan

The graduated repayment plan is suitable for borrowers with high incomes who want lower initial payments. This plan starts with lower payments, which can be as little as the interest accruing on the loan, and then increases them every two years, eventually tripling in size. The total repayment period is typically 10 years. While this plan may provide short-term financial relief, it results in higher overall interest costs compared to the standard plan.

Extended Repayment Plan

The extended repayment plan is designed for borrowers who need lower payments over a more extended period. It stretches the repayment period to up to 25 years and offers the option of fixed or graduated payments. With this plan, borrowers have a clear idea of their monthly payment commitments. However, it does not offer loan forgiveness, and the total interest paid over the extended period can be significant.

Public Service Loan Forgiveness

Public Service Loan Forgiveness is a federal program available to government employees, public school teachers, and certain nonprofit workers. Under this program, borrowers may qualify for tax-free loan forgiveness after making 120 qualifying loan payments under the standard repayment plan or an income-driven repayment plan.

It is important to carefully consider one's financial situation, income stability, and goals when choosing a repayment plan. Additionally, borrowers should be aware that changing plans may impact the total interest paid and the duration of the loan.

Additional funding

There are several options for additional funding for university students. These include scholarships, grants, and bursaries, as well as funding from other sources such as your university or the government.

Scholarships, Grants, and Bursaries

Scholarships, grants, and bursaries are funds set up by public and private bodies to provide additional financial support to students. These can be merit-based, needs-based, or awarded based on specific criteria such as personal circumstances or academic attainment.

University Funding

Some universities offer their own bursaries to support students' progress in their studies, particularly if they are involved in specific projects, certain subject areas, or specialisms.

Government Funding

The government may also provide additional funding for students with dependants, adult dependants, or disabilities. For example, students with children can receive a Child Dependents Allowance, and those with a disability can apply for the Disabled Students' Allowance (DSA).

Frequently asked questions