UK Student Finance 2026/27: Tuition and Maintenance Loans Guide

How Student Finance Is Structured

UK undergraduate student finance is split into two separate loans that behave quite differently. The tuition fee loan pays the university directly and does not depend on a family's income, while the maintenance loan is paid to the student to cover living costs and is calculated using a means test based on household income. Both loans are administered by the Student Loans Company, but only the maintenance loan amount changes from student to student based on financial circumstances.

Students in Scotland, Wales and Northern Ireland have broadly similar but separately administered systems (SAAS, Student Finance Wales, and Student Finance NI), with different fee caps, loan structures and repayment terms, so students outside England should check the rules for their home nation rather than assuming the English system applies.

The Tuition Fee Loan

The tuition fee loan covers the fee a university or college charges for the course, up to the maximum fee cap set for that academic year, and is paid in instalments directly to the institution rather than to the student.

• Available to almost all eligible students: The tuition fee loan does not depend on household income, so nearly every eligible full-time undergraduate can borrow the full amount charged up to the cap.
• Paid directly to the provider: The student never receives this money personally, and it is drawn down automatically each term once enrolment is confirmed.
• Part-time and postgraduate variants exist: Reduced tuition loans are available for part-time undergraduate study, and a separate postgraduate loan (not split into tuition and maintenance) is available for Master's and some Doctoral study.

The Means-Tested Maintenance Loan

The maintenance loan is assessed against the residual household income of the student's parents for most students under 25 living with or supported by their family, or against the student's own (and any partner's) income for independent or mature students. A sliding scale applies: students from lower-income households receive close to the maximum loan, and the amount tapers down as household income rises, though every eligible student is guaranteed at least a minimum loan regardless of parental income.

The living arrangement during study also changes the amount available. Students living at home with parents receive the lowest rate, students living away from home outside London receive a higher rate, and students living away from home while studying in London receive the highest rate, reflecting higher rents and living costs in the capital.

Extra Support and Grants

Beyond the core loans, students with additional needs or circumstances can access non-repayable support. The Disabled Students' Allowance helps cover specialist equipment, non-medical helpers and extra travel costs linked to a disability, long-term health condition, or specific learning difficulty such as dyslexia, and does not have to be repaid.

Student parents may qualify for a Childcare Grant or Parents' Learning Allowance, and many universities run their own hardship funds, bursaries and scholarships that are awarded on top of, and separately from, the government loan system.

How Repayment Works

Repayment begins automatically from the April after a graduate leaves their course, but only once their income exceeds the repayment threshold for their plan type; someone earning below the threshold makes no repayments at all, however large the outstanding balance. For most students starting from 2023/24 onwards under Plan 5, the threshold is frozen at £25,000 a year, with 9% of income above that threshold deducted through PAYE alongside income tax and National Insurance, or through Self Assessment for the self-employed.

Interest accrues throughout study and repayment at a rate linked to RPI, and any balance still outstanding at the end of the repayment term (40 years under Plan 5) is written off completely, with no further liability on the graduate or their estate.

Worked Example

Aisha starts a three-year degree living away from home outside London. Her parents' residual household income qualifies her for a maintenance loan close to the mid-point of the sliding scale, alongside a full tuition fee loan covering the fee cap each year, paid directly to her university.

Four years after graduating, Aisha is earning £32,000 a year on Plan 5. Her repayment is 9% of the amount above the £25,000 threshold: 9% of £7,000 is £630 a year, or £52.50 a month, deducted automatically through her employer's payroll alongside her income tax and National Insurance.

Common Pitfalls

• Missing the application deadline. Applying late can delay the first maintenance loan payment past the start of term, leaving a gap in living costs before the loan comes through.
• Not updating household income each year. Maintenance loans are reassessed annually, and failing to submit updated income evidence can result in only the minimum loan being paid.
• Confusing the loan with a conventional debt. Because repayments depend on income and the balance is written off after the term, comparing it directly to a commercial loan or overpaying aggressively is not always the right strategy.
• Forgetting about the postgraduate loan’s separate structure. Postgraduate loans are not split into tuition and maintenance and have their own threshold and rate, which can catch graduates moving straight into a Master's degree by surprise.
• Overlooking non-repayable grants. Students eligible for the Disabled Students' Allowance or a Childcare Grant sometimes miss out simply because they did not know to apply for them separately from the main loan.