Student loans 101
You only repay when you’re earning over a certain threshold after leaving university (currently £25,000 in England). Earning below that? You don’t pay anything back. No phone calls to chase repayments, no missed payments on your credit file.
Your repayments are based on what you earn, not what you borrowed. Let’s say you earn £28,000. You’ll repay 9% on everything above £25,000 – that’s £270 for the year, or about £22.50 a month. It comes straight out of your payslip like tax, so you don’t have to worry about managing it.
Whatever’s left gets written off after a set number of years. The exact timeframe depends on which plan you’re on and when you started. But the main thing to know is that many people never repay the full amount – that’s built into how the system works.
There are two types of loans you can apply for: tuition fee loans and maintenance loans. How much maintenance loan you can get depends on your household income – usually meaning your parents’ or guardians’ earnings. The higher their income, the lower your maintenance loan is likely to be. This is called means-testing.
Interest rates can seem very high on student loans. Student loan interest rates vary depending on which plan you’re on and your income. For some plans, interest can mean your balance grows even while you’re making repayments. This doesn’t affect how much you pay each month (still 9% above the threshold), but it can feel frustrating to see the total going up rather than down.
“The language around student finance often sounds scarier than it needs to be,” adds Georgia Markou, The Brilliant Club. “When people understand it’s income-contingent – meaning you only pay based on what you earn – that anxiety starts to lift. You’re not going to be chased for money you don’t have.”
Scotland, Wales, and Northern Ireland
Student finance rules differ across the UK:
- Scotland: Tuition is covered by SAAS for Scottish students studying in Scotland. You are still able to get a loan for living costs.
- Wales: Access to tuition fee loans and maintenance support is done through Student Finance Wales.
- Northern Ireland: Works similarly to England, but there are different thresholds and terms through Student Finance NI.
Make sure you check the specific rules for your nation.
Your questions answered
Student loans don’t appear on your credit file like credit cards or other debt. They won’t stop you getting a mortgage, but lenders do factor student loan repayments into affordability (like any monthly commitment).
The tuition fee loan pays your university directly, so you never see that money in your bank account. The maintenance loan (for rent, food, bills etc.) gets paid into your account in instalments throughout the year. You can apply for one or both.
The amount you can borrow for maintenance varies depending on household income and where you’re studying and living – you can typically borrow more if you’re studying in London due to higher living costs. You can apply for one or both depending on what you need.
No. You can borrow less than the maximum maintenance loan. You can’t reduce the tuition fee loan though – that’s fixed.
No – your account is private once you’re 18. However, if you’re under 25, you’re usually assessed as dependent, so Student Finance needs your parents’ income to calculate your maintenance loan entitlement (even if you don’t live with them).
Exceptions apply if you’re financially independent, married, have children, or are estranged from your parents. The rules can be complex, so check the Student Finance guidance for your specific situation.
No. Any money you earn from part-time work while you’re a student doesn’t count towards the ‘household income’ used to calculate your maintenance loan. Your loan amount is based on your parents’ or household income from before you started university (or your own income if you’re an independent student) – your earnings during your studies won’t change it.
You only pay for the year(s) that you study. If you leave partway through, you may owe a proportion of that year’s fees. You keep any maintenance loan that you’ve already received, but future payments will stop. If you want to return to study later, your eligibility depends on previous funding used – always contact Student Finance to check.
What you can do now
Before applying:
- Use the student finance calculator for your nation
- Know that maintenance loans are means-tested based on the household income of your parents/guardians
- Research bursaries, scholarships, and hardship funds
- Have a look at Student Finance’s website (England)
If you’re struggling:
- Your university’s student services and hardship funds are there to help
- Free, confidential advice is also available from Citizens Advice and the National Union of Students
- Talk to someone early – whether that’s family, student support, or a trusted adviser
“Financial difficulty shouldn’t be a barrier to completing your degree,” says Helen Foster, Money Ready. “There’s support available, but you have to know it exists and feel confident asking for it. That’s why financial education matters – it’s not just about numbers; it’s about knowing your rights and where to turn.”
Knowledge is power
At Money Ready, we believe financial education should be a right, not a privilege. The Brilliant Club exists to increase the number of students from underrepresented backgrounds progressing to top universities. We both know that getting there is only half the story – understanding how to navigate student life financially is just as important.
Student finance might feel complicated, but you don’t have to figure it out alone. The more you know now, the more confident you’ll feel later.
Want to learn more? Money Ready offers free financial education resources on the Learning Hub, and The Brilliant Club provides information for Year 12/13 students preparing to go to university at: https://thebrilliantclub.org/join-the-dots/.
This article provides general educational information about student finance in the UK. It’s not personal financial advice. If you need specific guidance, speak to a professional adviser or contact Student Finance directly.
Financial difficulty shouldn't be a barrier to completing your degree. There's support available, but you have to know it exists and feel confident asking for it. That's why financial education matters – it's not just about numbers; it's about knowing your rights and where to turn.Helen Foster, 16+ Programmes and Delivery Director, Money Ready