Student loans explained: how paying for university works

University in England is expensive, but most students do not pay fees up front. Instead, they take a student loan from the government. The way these loans are paid back is very different from a normal bank loan. Here is a simple guide. (Figures are for 2026/27 and change most years, so always check the latest on GOV.UK.)

Two kinds of loan

1. Tuition Fee Loan
This pays your course fees. The money goes straight to the university, not to you. In 2026/27 universities can charge up to £9,790 a year, and the loan can cover the full amount.

2. Maintenance Loan
This helps with living costs such as rent, food and travel. It is paid into your bank account at the start of each term. How much you can get depends on your household income and where you live while studying. For 2026/27, the maximum amounts are roughly:

Students from lower-income households get more. Students from higher-income households get less, and families are expected to help with the gap.

How repayment works (Plan 5)

Students starting university from August 2023 are on Plan 5:

• You only repay once you earn over £25,000 a year (the threshold at the time of writing).
• You repay 9% of what you earn above that amount, not 9% of your whole salary.
• Repayments are taken automatically from your pay, like tax.
• If your income drops below the threshold, repayments stop.
• Any amount left after 40 years is written off.
• Interest is added at the rate of inflation (RPI). It was 4.1% at the time of writing.

A simple example

Imagine you earn £30,000 a year.

• Amount above the threshold: £30,000 − £25,000 = £5,000
• 9% of £5,000 = £450 a year, which is about £37.50 a month.

So the monthly payment depends on what you earn, not on how much you borrowed.

Grants and bursaries

• Many universities offer bursaries or scholarships that do not need paying back. Check each university's website.
• The government plans to bring back small maintenance grants from 2028/29 for students from lower-income homes on certain priority courses. The exact courses are still to be confirmed.
• Extra help is available for students with disabilities, care leavers and students with children.

When and how to apply

Apply online through Student Finance England (on GOV.UK) during Year 13. Applications usually open in the spring before you start university. Apply early, even before your place is confirmed, so the money arrives on time.

Things to think about now

• Degree apprenticeships let you earn a salary and get a degree with no tuition fees. They are competitive, so good GCSEs and A levels matter.
• Living at home can cut living costs a lot.
• A part-time job and a simple budget help students manage money at university.

In short

Tuition fee loans pay the university; maintenance loans help with living costs. You repay 9% of earnings over £25,000, automatically, and anything left after 40 years is written off. Check GOV.UK for the latest figures, and look at bursaries and degree apprenticeships too.