How it works: student loans

How it works: student loans

author: Bryony Pearce

By Bryony Pearce


You’ve decided on your course, you’ve decided on your uni, but do you know how to secure your student loan? Well, you will very soon.

Heading to university is an exciting time. It’s the start of brand-new independence. It marks the beginning of your future career. And it’s an opportunity to meet and make new friends for life. But, amongst all the excitement is the F word. Finance.

With £9,000+ tuition fees a year getting a degree isn’t cheap, and, for most of us, it’ll take a student loan to make it possible. But how do they work? Where do you start? When should you apply? And how do you repay them? All questions you’re probably asking, and all ones we’re about to answer.

Applying for a student loan

You can actually start applying for a student loan before your place has even been confirmed, but the deadlines are a little stricter.

Below are the application cut-off dates by country if you want the money in your account for the start of term:


Application deadline


May 24, 2019

Northern Ireland

April 12, 2019


June 30, 2019


May 11, 2019

Don’t panic if you miss the deadline though. You can still apply for your student loan up to nine months after your course’s state date, it just means you might not have access to your funding until a few weeks after everyone else.

How much money can I borrow?

The answer to this isn’t black and white. The amount you’re entitled to will depend on a) where you’ll be living (if London, you’ll receive more to reflect the higher living costs), and b) your family’s income.

The second thing to know, is there are two types of student loans: maintenance loans and tuition fee loans. We’ll talk about the latter in detail a little later on, but for now, let’s focus on the former.

Maintenance loans

Maintenance loans are there to help you cover the cost of living - like accommodation, food, and bills. If you move away from home you’ll be entitled to more because you’ll likely be paying rent.

For the 2019/20 academic year, the maximum maintenance loan you can get if you relocate from your family home is £8,944. The upper cap for those living at home is £7,529.

As we touched on earlier though, your family’s income plays a part in determining how much you receive, so you won’t always be credited with the maximum amount. Basically, as a general rule, the more your family earns, the less maintenance loan you’ll get.

Here’s an idea of what sort of maintenance loan payout you could expect in England:

Household income

Maintenance loan

£25,000 or less
















£62,215 or above


Numbers in the table are taken from the student finance calculator at

Tuition fees

Now on to the second type of loan: tuition fees. As the name suggests, these exist to help you finance the cost of your course. Here are a few quick-fire facts about them:

1. You have to start repaying your tuition fees the April after your course concludes.

2. In England, you can borrow up to a maximum of £9,250 a year to cover the cost of tuition. For Wales it’s £9,000, in Northern Ireland it’s £4,160, and if you’re in and from Scotland, you don’t have to pay for tuition at all.

3. Any money from your tuition fees is paid directly to your university, so you can’t be tempted to spend it on anything else.

4. Your tuition fees can’t be used for things like course materials, equipment, stationery etc. These’ll have to either come out of your maintenance loan or your own personal pocket.

How do I apply for a student loan?

First off, head over to this government page and complete the application form. Then, simply wait for your loan declaration to come in the post to find out how much you’ll be awarded.

Paying back student loans

Unfortunately, there’s no such thing as free money and you’ll have to repay whatever’s been loaned to you. As we mentioned earlier, your loan repayments start the April after you’ve finished studying.

However, that’s only if you’re earning more than £25,725 a year. If your salary’s below that threshold you don’t have to pay a single penny, and if you never get above that threshold, you’ll never have to pay.

Once you do start earning more than £25,725 a year, you’ll have to contribute 9% of everything you earn above that amount though.


Your annual salary is £30,000. That’s £4,275 above the required salary threshold. 9% of £4,275 is £384.75. So you’d have to pay £384.75 towards your student loan that year.

The final thing worth mentioning about repayments is if you haven’t paid your loan off after 30 years your outstanding balance will be wiped off.

How do I make payments?

You don’t need to worry about this bit. Once you have a job, your student loan repayments will be taken out from your salary before it lands in your account. Simple!

Will I be charged interest on my student loan?

Yes, you will. Here’s how interest on student loans works:

  • While you’re still studying, you’ll usually be charged the Retail Price Index (RPI) from March that year, plus another 3%.
  • Once you’ve finished your time at uni, you’ll continue to be charged interest. If your salary’s below the threshold, this remains at the same rate as RPI inflation.
  • If your salary’s above the threshold, however, you’ll pay more interest. Usually, the rate will rise from RPI to RPI plus 3% (for those earning more than £46,305).

*All figures correct at time of writing: May 2019.

Disclaimer: All information and links are correct at the time of publishing.

author: Bryony Pearce

By Bryony Pearce

How it works: student loans How it works: student loans