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Education and learning

Student Loans

If you’re an eligible student doing a full-time higher education course, you can take out a Student Loan for Tuition Fees to cover your tuition fees and a Student Loan for Maintenance to help with your accommodation and other living costs.

Student Loans from the government: how do they work?

Student Loans are there to help with the costs of higher education. They’re issued by Student Finance Direct, a service managed by the Student Loans Company in partnership with local authorities and the government.

The interest on Student Loans is linked to the rate of inflation, so in real terms what you repay will be broadly the same as what you borrowed.

There are two types of loan available - you can take out either or both:

  • a Student Loan to cover your tuition fees - called the ‘Student Loan for Tuition Fees’
  • a Student Loan to help with your accommodation and other living costs - called the ‘Student Loan for Maintenance’


Student Loan for Tuition Fees

All eligible full-time higher education students entering higher education in or after September 2006 can get a Student Loan for Tuition Fees.

The loan will cover any amount up to the full amount you’re charged for tuition fees. For new students - and most who started in 2006/2007 - this means:

  • up to £3,145 in 2008/2009
  • up to £3,070 in 2007/2008

 The Student Loan for Tuition Fees is paid directly to your university or college by Student Finance Direct.


Student Loan for Maintenance

The Student Loan for Maintenance is there to help towards your accommodation and other living costs while you’re studying. The maximum loan for 2008/2009 is £6,475. For 2007/2008, it’s £6,315.

Student Finance Direct will usually pay the money into your bank account in three instalments - one at the start of each term.

How the Student Loan for Maintenance works

All eligible full-time students can get a Student Loan for Maintenance, but the exact amount you can borrow will depend on several factors - including your household income, where you live while you’re studying and whether you’re in the final year of your course.

It’s also affected by any help you get through the Maintenance Grant (though not the Special Support Grant).

Working out whether you can get the maximum loan

You can take out around 75 per cent of the maximum Student Loan for Maintenance regardless of your household income - this is called the 'non income assessed' part of the loan.

Whether you get the remaining 25 per cent - the 'income assessed' part of the loan - depends on your household income.


How much you can get

Student Loan rates for 2008/2009

Follow the link below to find out more about the rates for 2008/2009.

Student Loan rates for 2007/2008

Follow the link below for more about the rates for 2007/2008.

If you started before September 2006

The maximum Student Loan for Tuition Fees available is different for students who started before September 2006 - see ‘Student Loan rates 2007/2008’ or ‘Student Loan rates 2008/2009’ for details.

This alternative rate also applies to some students who actually started in 2006/2007 - including many who took a gap year in 2005/2006.


Repaying Student Loans

Your first repayment will be due in the April after you leave your course (the start of the new financial year).

You’ll repay nine per cent of your earnings over £15,000 (or the monthly or weekly equivalents) - but you can repay more if you want to clear your loan faster.

The more you earn, the quicker you repay the loan. So, someone earning £18,000 a year (the average starting salary for a graduate-level job) will have to pay back nine per cent of £3,000 (£18,000 minus £15,000). This works out at around £5.19 a week.

For more details, see ‘How and when you repay your student loan (courses starting from 1998)’.


Interest on Student Loans

Student Loans accrue interest from the date they are paid out, up until the date when they are repaid in full.

The interest rate is announced once a year and applies from 1 September to 31 August the following year. The interest rate is linked to the rate of inflation, in line with the Retail Prices Index. This means that the amount you repay will be broadly the same, in real terms, as the amount you borrowed. No-one makes a profit on the loan.

The interest rate is currently 3.8 per cent.


Effect on other financial help

If you get income-related benefits or tax credits, the Student Loan for Maintenance will be counted as income when working out what you’re entitled to.

This will be based on the maximum amount of loan you're entitled to borrow - even if you choose not to take it out.


If your circumstances change

If your circumstances change – for example, if your income goes up or down - it's important to tell your local authority and Student Finance Direct.


How to apply

You apply for a Student Loan when you fill in the main application for student finance. Applying online is the fastest and easiest way to do it.


Can you get a Student Loan as part of the standard student finance package?

You'll qualify for the standard student finance package if:

  • you’re doing a full-time higher education course, or a full or part-time Initial Teacher Training course, and
  • you, your course and your place of study are eligible

To qualify for a Student Loan for Maintenance, you must also be aged under 60 when you start your course. There’s no age limit for the Student Loan for Tuition Fees.

See ‘Do you qualify for student finance?’ to check if you’re eligible for the standard student finance package.

Not from England?

If you’re from outside England, the help you can get through Student Loans may be different.


Students from England: what other financial help can you get?

Follow the relevant link below for a guide to other help you may be able to get on top of Student Loans, including information on grants and bursaries.


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