How student finance actually works

When you go to university, it might be the first time you’ve had to deal with the financial side of things – and it can all be a bit confusing. This guide aims to give you a simple but comprehensive breakdown of the basics behind student finance.

Check The Student Room for all the latest information from Student Finance England, including how to apply for undergraduate student finance for 2025-26.

What are tuition fees?

These are the annual fees charged by the university or college to each student to cover the cost of your course and access to resource materials, such as the library. They don’t cover the cost of living or additional course materials, including books.

Tuition fees vary depending on where you come from and where you are going to study. The following table shows the maximum amount of tuition fees you would pay for each year of study on a course starting in the academic year 2024 to 2025.

But these fees are soon going up. In November 2024, the UK government announced that the cap on tuition fees at universities in England is to be increased.

From 1 August 2025, the maximum amount that English universities can charge for tuition fees will go up to £9,535. In December 2024, the Welsh government also announced that it would increase tuition fees to £9,535 from September 2025.

• Read more on The Student Room from Student Finance England: how the tuition fee loan is paid

What is a student loan?

Funding is available in the form of student loans to help you pay these fees, as well as to help you with the cost of living while you study.

In order to qualify for a student loan, you must be studying at a recognised or listed college or university on a full-time course. These are institutions that can legally award degrees or are affiliated to those that can. You must also be a UK national or have settled status. And you need to have been living in the UK for at least three years prior to starting your studies.

The loan is broadly split into two parts: a tuition fee loan to cover the cost of your studies and a maintenance loan to help you with the cost of living while studying. Tuition fee loans are generally paid directly to your university or college so generally you won’t see the money.

Maintenance loans are paid on a sliding scale according to your individual circumstances. These loans are means tested by your household income, which for most young people effectively means that of their parents. Depending on how much they earn, the means testing system may expect them to contribute to your cost of living while studying.

Remember that all student loans need to be repaid once you have graduated and started earning. And interest will be charged on your loans from the moment you take them out – even while studying.

But, bear in mind you only start paying back once you’re earning a salary above a specified threshold.

How to apply for a loan

Again, the exact application process differs across the UK. For example, in England you will need to apply to Student Finance England and in Scotland to the Student Awards Agency.

For means tested maintenance loans you will need to provide information about you or your family’s household income. You will also need to apply for your loan at the start of each academic year, as circumstances and entitlements can change. You can apply for all of the above loans online: here's more information from Student Finance England on The Student Room.

---

---

How do loan repayments work?

If you started university in September 2024, you will repay your loan over a 40-year period. But it’s only repayable once you start earning over a certain threshold, as Student Finance England explains on The Student Room here.

The threshold for repayments is £25,000. Your repayments will be 9% of everything you earn that is above that threshold. The interest rate is capped at the retail price index (RPI) rate of inflation.

It’s important to remember that if you don’t earn over the threshold, you are not required to make any loan repayments although you will still be accruing interest.

Any outstanding loan amounts are written off after 40 years.

Here's more from Student Finance England on The Student Room about loan repayment.

• Read more: student loan repayments

Have student loan repayments changed?

Student loan repayments changed in 2023. Those who started university since September 2023 have a lower repayment threshold for their student loan (£25,000) than those who started before then (£27,295).

The length of time that graduates have to pay back their student loans has also increased. Previously, any remaining student debt was written off after 30 years. For students taking out student finance now, remaining debt is wiped after 40 years.

Interest was charged on a sliding scale with a maximum amount limited to 3% above the RPI, but is now capped at retail price index (RPI) inflation rates.

Is other funding available?

Even with a tuition fee loan and maintenance loan, funding your university experience can be a challenge. Many students get part-time jobs, but this may not always be an option due to the demands of studying. However, other funding is available in the form of bursaries and scholarships.

These are funds set up by public and private bodies to give additional help to students who may need it or who have shown promise in certain areas.

It’s a good idea to do some research to see what extra funding is available. You should also be prepared to write personal statements and attend interviews. Putting in this relatively small amount of effort might reap big rewards.

• Read more: everything you need to know about getting a university scholarship, grant or bursary

There is also additional student finance available for student from certain backgrounds, such as those who have been in care or those who have dependents.

• Information on The Student Room for students with dependants
• Information on The Student Room for care leavers

Budgeting for university

Student finance doesn’t have to be off-putting; funding is there to make sure you get the education you deserve.

It’s worth creating your own university budget. You will need to factor in the cost of tuition, accommodation, food, travel, utility and other bills, socialising and contingencies (such as unexpected travel costs, clothes, holidays and other non-essentials). This will help you work out how much you may need to borrow and where you can make savings.

• Read more: what will you spend your money on at university?

Read more on The Student Room:

• How to look after yourself and live independently at university
• Support at uni: the services that helped students most

---

Our partnership with UEA (University of East Anglia)

The Student Room is proud to work with UEA, a UK top-25 university (Complete University Guide 2025) and UK top-30 university (The Times/Sunday Times 2024), as the official partner of our student life section.

Located on the edge of Norwich, a vibrant city full of secret gems just waiting to be discovered.

Visit their profile page to learn more or join the conversation on The Student Room's UEA forum.

Read more from the student life section

Find out more about UEA on The Uni Guide

Ask a UEA student a question about university

Study with UEA