Most people heading off to university or college are best off getting a student loan to finance their studies. That’s because it’s a cost-effective way to cover the bills with an affordable repayment plan built in. The maximum amount you can borrow depends on various factors, but it’s mostly down to your course and your household income.
Student loans are split into two main components. The first is the tuition fee loan, which covers the costs of the course you’re studying. The second element is a maintenance loan that goes towards the cost of living. Each component has its own maximum.
Your tuition fees are decided by your university or college, but the government sets a maximum value they can charge. At the moment, the upper limit is £9,250 a year for normal courses. If you’re doing an accelerated course, then the maximum is £11,000 a year.
While universities and colleges can choose to charge less, the vast majority don’t, so you’ll end up borrowing the full amount to pay your fees.
Maintenance loans help cover living costs while you study. This could be things like student accommodation, books and supplies, food and so on. It’s up to you how you spend it.
The maximum is dependent on where you live when you do your course. The current limits are:
|Living at home||Up to £7,747||Up to £7,987|
|Living away from home, outside London||Up to £9,203||Up to £9,488|
|Living away from home, in London||Up to £12,010||Up to £12,382|
|A year abroad with a UK course||Up to £10,539||Up to £10,866|
Help from your local authority
It’s worth noting that the loan isn’t designed to cover the full living costs. How much you will get depends on your household income, which is usually defined by the earnings of the parent(s) with whom you live.
If your parents are no longer together, and you share a home with either your mum’s or dad’s new partner, their income will be taken into account too. If the household collectively earns more than £25,000 a year, your parents are expected to chip in - whether they actually do or not.
The government has a handy student finance calculator that helps you work out what you can borrow. Until future figures are announced, it can only give predictions for 2020-21 and 2021-22, but it will still give you a good idea if you’re trying to get an idea of likely costs for studying in the future.
As a student who wants to run the calculator, you’ll need to know your annual household income plus your own. The calculator also tells you if you’ll get extra funding. For instance if:
You have children under 17
You have adult dependents (financially)
You have a disability, health condition or learning difficulty
You’re on a low income
You could also be eligible for extra bursaries if you’re studying teacher training, dental, medical or healthcare, or social work.
Your tuition fee is paid directly to your university. The maintenance loan is paid into your bank account at the beginning of each term.
The rules are slightly different if you’re in Scotland, Wales or Northern Ireland.
If you’re a Scottish student and you choose to study in Scotland, then the Student Awards Agency Scotland (SAAS) pays your tuition for you (and you don’t need to pay it back).
Students from elsewhere in the UK will have to pay tuition fees up to a maximum of £9,250 a year.
Living costs in Scotland are made up of a mixture of maintenance loans and bursaries. The biggest loan you can get is £6,750. Whether you’ll get a supplementary bursary and how much it will be depends on household income and how old you are.
Find out more here.
Tuition fees for those studying in Wales are £9,000 for Welsh students and £9,250 for students from elsewhere.
Maintenance is a mixture of grants and loans, and the amount depends on where you live. The maximum is £12,260 for students living in London. Everyone gets the same amount but the proportion you must repay is determined by your household income.
Northern Irish students studying in Northern Ireland pay up to £4,395 a year in tuition fees. Anyone who’s coming from England, Scotland or Wales will be charged up to £9,250 a year.
Maintenance is a mixture of grants and loans like in Scotland, and dependent on household income.
Find out more here.
Student loan repayments in the UK work a bit like a graduate tax in that you only pay if you earn over a certain amount. For instance, if you started university before 1 September 2012 you pay 9% of your earnings over £19,884. If you started after that you pay 9% of your earnings over £27,288.
You don’t have to pay anything back if you’re earning less than that threshold.
The debt is wiped after a certain period, usually when you’ve been paying for 25-30 years or when you reach 65, depending which plan you are on. The vast majority of people never clear their whole debt.
Interest rates vary, topping out at about 4.1%. While that might seem high, most people never clear their loan before it’s wiped and so never pay any interest. Find out whether it’s worth repaying early to avoid interest with the following guide