Student Finance Explained

Navigating student finance can feel overwhelming. This guide breaks down the key components to help you understand how it works in England.

Tuition Fee Loan

The Tuition Fee Loan covers the full cost of your university tuition. You don’t need to pay anything upfront. The loan is paid directly to your university by Student Finance England (SFE). Eligibility is based on your nationality and residency, not your household income. You’ll typically be eligible if you’re a UK national or have settled status and have lived in the UK for the three years before starting your course. Repayments only begin after you’re earning above a certain threshold.

Maintenance Loan

The Maintenance Loan helps with your living costs while you study. The amount you can borrow depends on your household income (your parents’ income, if you’re under 25 and living at home, or your partner’s income if applicable) and where you study. Students studying in London receive a higher loan amount than those studying elsewhere. Some students receive the minimum maintenance loan, regardless of household income. This loan is paid directly into your bank account in three installments each year.

Repaying Your Loan

Repayments begin the April after you graduate, and only if you’re earning above the repayment threshold. The exact threshold varies depending on which repayment plan you are on, determined by when you started university. Currently, there are Plans 1, 2, 4, and 5. You’ll repay a percentage of your income above the threshold. For example, on Plan 2 (most students who started university after 2012), you’ll repay 9% of your income above the threshold. This is deducted automatically from your salary, like tax and national insurance. If your income falls below the threshold, repayments stop automatically.

Interest

Interest accrues on both your Tuition Fee Loan and Maintenance Loan. The interest rate varies and is linked to the Retail Price Index (RPI) inflation rate. Higher earners will pay a higher interest rate than lower earners. This can seem daunting, but remember that the repayment amount is based on your income, not the total amount you owe. Any outstanding loan balance is written off after a certain period (usually 30 or 40 years, depending on your plan).

Additional Support

Some universities offer bursaries and scholarships, which don’t need to be repaid. Explore these options by checking your university’s website. You might also be eligible for Disabled Students’ Allowances (DSAs) if you have a disability, long-term health condition, mental health condition, or specific learning difficulty. DSAs help cover the extra costs you may face due to your condition. Furthermore, there may be hardships funds and other forms of financial support offered by your university.