The vast majority of students heading off to university will rely on loans to fund their studies and living expenses – and many will continue repaying these loans for most of their working lives.
Students in England have an average debt of £53,000 by the time they begin repayments in the April following graduation, according to the latest government data. Almost £21 billion is loaned to 1.5 million higher education students in England each year alone.
Recent changes to the student loan system mean more students will now repay their loans than in previous years. Under Plan 5, for students starting courses in England after August 2023, the repayment earnings threshold and interest rates have been lowered, and loans are written off after 40 years rather than the previous 30.
As a result, six in 10 starting this year are expected to repay their loans in full – double the proportion who started their course before 2023.
However, the student loan system differs depending on where you live. England, Scotland, Wales and Northern Ireland all offer their own arrangements for loans and repayment.
Paying for your course
Undergraduates attending a university in England and Wales typically pay tuition fees of £9,535 a year – up from £9,250 last year. This adds up to £28,605 for a typical three-year course or £38,140 for a four-year programme.
Students from Northern Ireland who study in Northern Ireland pay a reduced rate of £4,855. Scottish nationals studying in Scotland usually pay no tuition fees, as they are covered by Student Awards Agency Scotland (SAAS). Other UK students opting to study in these countries pay the full £9,535, like they would in England.
Tuition fees in England are typically covered by a loan administered by the government-backed Student Loans Company (SLC), paid directly to your university of choice. There is no upper age limit for tuition fee loans, and they are not means-tested.
Another option is to pay for tuition fees upfront from savings or with financial help from family, to reduce the amount to be repaid after leaving university.
Maintenance loan and grants
Separate to the tuition fee loan is the maintenance loan. This helps cover living costs such as rent, groceries, course materials and transport.
Maintenance loans are again covered by the SLC in England, and students apply each year. The money is paid straight into a student’s bank account, three times a year at the start of each term or monthly in Scotland. You don’t have to apply for a maintenance loan before the start of the academic year – applications can be made up to nine months after your course starts.
| Region | Living away from home | Living at home with parents | Living at home with parents |
|---|---|---|---|
| England | £10,544 | £13,762 | £8,877 |
| Scotland | £9,400 | £9,400 | £9,400 |
| Wales | £11,345 | £14,415 | £9,480 |
| Northern Ireland | £8,132 | £11,391 | £6,300 |
The amount you’ll get in maintenance loan depends on your family’s household income and where you live.
In many cases, students relying on maintenance loans will find the loan does not stretch far enough to full living costs. In some cases, it doesn’t even cover the cost of accommodation.
Accommodation costs
The average cost of rent is £5,630 for a 10-month tenancy, or £8,120 for those studying in London, according to the latest annual National Student Accommodation survey from advice website Save The Student. Yet the maximum maintenance loan is only given to students whose household income is below £25,000, a figure that has remained unchanged in cash terms since 2008 despite rising living costs.
The annual Daily Mail University Guide survey shows a huge variation in the prices of the cheapest accommodation at each university. Leicester offers the cheapest rooms, starting at £3,024 for the academic year, and 19 universities have prices that begin at less than £4,000 per year.
At the other end of the scale, the cheapest accommodation costs at least £7,000 per year at 13 universities. Often, the number of very cheap rooms is extremely limited, and at 52 institutions the most expensive rooms cost at least £10,000 a year.
The government’s assumption is that parents will top up the difference between living costs and any loan shortfall, although many parents complain this is unfair as they can’t always afford to do so.
A recent report from the Higher Education Policy Institute found that, on average parents, had to find an extra £46,000 on top of student loans to fund a child through university outside of London (or £56,000 extra in the capital itself).
Those who don’t receive money from their family will have to work to top up their living costs, or they may be able to get a bursary. Students may be eligible for a bigger maintenance loan if they have a sibling also at university, which lowers the sum considered to be household income.
Students from Wales studying away from home can borrow up to £11,345 or £14,415 in London through Student Finance Wales.
If you’re a mature student, you won’t be eligible for a maintenance loan if you’re 60 or over on the first day of the first academic year. A ‘special support loan’ is available based on your household income.
| Parental household income | Living away from home | Living away from home in London | Living at home |
|---|---|---|---|
| Under £25,000 | £10,544 | £13,762 | £8,877 |
| £35,000 | £9,038 | £12,231 | £7,387 |
| £45,000 | £7,532 | £10,700 | £5,897 |
| £55,000 | £6,026 | £9,168 | £4,407 |
| £65,000 | £4,915 | £7,637 | £3,907 |
| £70,000+ | £4,915 | £6,871 | £3,907 |
Government grants or bursaries
Maintenance grants were stopped in England in 2016/17, replaced entirely by maintenance loans. However, other UK countries offer non-repayable financial support in the form of grants or bursaries.
Every student from Wales gets a grant of at least £1,000. The maximum grant is £8,100 for students with a household income below £18,370.
In Scotland, young students can get a bursary of £500 if household income is below £34,000. A maximum bursary of £2,000 is given for household income below £21,000.
In Northern Ireland, students can get £3,475 through a maintenance grant, or special support grant through Student Finance Northern Ireland, if household income is £19,203 or less. Partial grants are awarded to those with household income below £41,065.
Additional funding may also be available to students across the UK depending on their personal circumstances, such as if they have a disability have a disability or a grant to help with childcare costs.
University-funded bursaries and scholarships
Students can tap into more than £400m of university-funded bursaries and scholarships to help fund their way through university.
A Daily Mail University Guide survey logged the financial support across 100 universities, although 31 declined to reveal how much they gave.
Much of the bursary support is means-tested and based on annual parental household income. Eligibility thresholds vary between institutions; they can be as high as £70,000 (at Imperial College London) but more typically have a limit of £25,000.
Both the sum awarded and the number of beneficiaries are similarly variable. Often the most eye-catching sums are available only to one or two students each year, so it is worth reading the small print on university websites, which all have details of their bursary and scholarship offerings, usually to be found in their Fees and Finance section.
Universities with a socially diverse intake, such as Salford, often favour bursary schemes that benefit all students. These schemes can take the form of an annual credit with an online learning resources retailer. This also ensures the money is spent on books rather than beer.
Special hardship funds have been established to help students cope with one-off financial crises. These have grown in size and popularity since the cost-of-living crisis, and many now allow students to make more than one application for support during their university years.
Non-means tested support is also offered widely based on academic performance. This mostly rewards strong performance at A-level, but other universities, like Aberystwyth, offer the chance for students to sit an entrance exam with £1,000 annual scholarships offered to the top 50 achievers.
Subject-specific awards are common in many universities as well as scholarships for women studying science, technology, engineering and maths (STEM) subjects. Talented sportsmen and women and musicians are also rewarded with a mix of cash, coaching, tuition and lifestyle benefits.
Repaying student loans
Like with all borrowing, debt must be repaid. However, student loans are different from conventional loans.
On the Plan 5 system for students in England starting this year, you begin repaying the loan if you earn over £25,000 a year. Repayments are 9 per cent of earnings above £25,000, starting the April after you graduate or leave. Repayments begin on earnings above £26,065 in Northern Ireland, £28,470 in Wales and £32,745 in Scotland.
If your income falls below the income thresholds, repayments will stop automatically and only start again when your income is back over the threshold.
Repayments are collected through payroll if you’re employed and via your annual self-assessment return if self-employed.
| Annual salary | Monthly repayments | Annual repayments |
|---|---|---|
| £24,000 | £0 | £0 |
| £27,000 | £15 | £180 |
| £35,000 | £75 | £900 |
| £45,000 | £150 | £1,800 |
| £55,000 | £225 | £2,700 |
| £65,000 | £300 | £3,600 |
| £75,000 | £375 | £4,500 |
Your student loan incurs interest, which is currently 4.3 per cent a year for most of the UK, or up to 7.3 per cent in Wales, depending on income.
Interest is charged from the day the first loan payment is made. It is charged daily and added to your loan balance each month. So, by the time first repayments are made in the April following graduation, interest will have been accruing for the best part of four years from the first loan advance.
For students on Plan 5 (starting after August 2023), any outstanding loan is wiped after 40 years. In Scotland and Wales, this occurs after 30 years, while in Northern Ireland it’s after 25 years.