Answers · UK 2025/26

Does a student maintenance loan affect Universal Credit in 2026/27?

Yes. Most student maintenance loans count as income for Universal Credit and reduce your payment, even if you do not take the full loan you are entitled to. The maintenance grant and loan are spread across the months you study, with a set amount disregarded, so your monthly award falls during term time.

Last updated: 10 June 2026Last reviewed: 10 June 2026How we verify

Full answer

If you are a full-time student claiming Universal Credit, your student maintenance loan is normally treated as income, which reduces your monthly payment. This applies to the loan you are entitled to, not just the amount you actually take, so choosing a smaller loan does not protect your benefit. Tuition fee loans are ignored because they are paid directly to the university and do not help with living costs. The maintenance loan is divided across the months of your course that it is meant to cover, then a fixed monthly amount is disregarded before the rest is counted as income and deducted from your award. Worked example: if your maintenance loan is assessed at GBP 9,000 for the year and Universal Credit spreads it over, say, nine assessment periods, that is GBP 1,000 a month, less the standard disregard, with the balance reducing your Universal Credit. Because of this, many full-time students cannot claim Universal Credit at all unless they fall into an eligible group, such as lone parents, students with a disability or limited capability for work, or those with a partner who can claim. Repayment of the loan itself is separate and only begins once you finish studying and earn above the relevant threshold: Plan 5 starts at GBP 25,000, Plan 2 at GBP 29,385, both at 9% of income above the threshold. While studying, the loan counts as income; after graduating, the repayments are deducted from your pay. Use a budget planner to track term-time income, and check student rules on GOV.UK.