How do student tuition and maintenance loans work?

Interest on some student loans in England will be capped at 6% in the 2026-27 academic year.

Students and graduates in England have different loan plans depending on when and what they studied, and the cap will only apply to Plan 2 loans and Plan 3 postgraduate loans from September.

Plans also vary across Wales, Scotland and Northern Ireland, but most people still have to borrow to pay for their studies and the average graduate now leaves university with debts of about £53,000.

Students who took out a loan in England to start university between September 2012 and July 2023 have a Plan 2 loan. These loans are still issued in Wales.

Graduates with Plan 2 loans pay back 9% of everything they earn over the repayment threshold.

In the November 2025 Budget, Chancellor Rachel Reeves said the threshold would be frozen at £29,385 between 2027 and 2030, rather than rising with inflation.

That means students will start repaying their loans sooner than they would otherwise have done, and their rising salaries will lead to greater repayments.

Campaigners want to see that change reversed, and for the government to consider a lower repayment rate and a lower interest rate.

Currently, Plan 2 loans take on interest at the Retail Prices Index (RPI) measure of inflation, plus up to 3% depending on earnings.

It means many graduates with Plan 2 loans have struggled to make a significant dent in the overall debt they left university with, which is often in the tens of thousands of pounds, despite making repayments for several years.

Currently the maximum interest you can accrue on Plan 2 is 6.2%. It will be capped at 6% in England in the 2026-27 academic year.

Plan 2 loans have been replaced in England by the current Plan 5 loans, which have different terms, but loans also vary according to where in the UK you live.

Student loans are typically made up of:

• a loan for tuition fees
• a maintenance loan for living costs

Most people are entitled to the tuition fee element, which is equal to the annual cost of their course. Current levels vary across the UK:

• England and Wales: £9,535 a year
• Northern Ireland: £4,855 for Northern Irish students or £9,535 for other UK students
• Scotland: Free for the majority of Scottish students and £9,535 for other UK students

The separate maintenance loan is intended to cover accommodation, food, books and equipment.

Maintenance loans are means tested, so the amount you get depends on your family's household income. You might get extra money if you are disabled, or have children.

If you are under 25 and have no contact with your parents, you might be able to apply as an "estranged student". This means your parents' financial situation is not taken into consideration.

Research by the Higher Education Policy Institute published in May 2024 suggested maintenance loans in England typically only covered about half the cost of living, and even less for students in London.

In April 2026, over 20,000 students were told they had been "mis-sold" their maintenance loans as their courses were ineligible, and were told to pay back the money they had received.

The amount of maintenance help available varies across the UK.

Undergraduate students in England and Wales can borrow more for day-to-day living costs in 2025-26 than in previous years.

The maximum maintenance loan for students from England living away from their parents outside of London, for example, has risen to £10,544, up from £10,227.

The government is reintroducing maintenance grants of up to £1,000 per year for students from lower income households in England on courses that support its Industrial Strategy. They will be available from 2028 and the government is still drawing up a list of eligible courses.

Students from Wales studying away from home can borrow up to £11,345, up from £11,150.

Welsh students may also be entitled to maintenance grants, which do not have to be paid back.

In Scotland, the maximum annual maintenance loan is £9,400 for under-25s. Students can also apply for a number of bursaries and grants.

Students from Northern Ireland who are studying away from home can borrow up to £8,132(or £11,391 if they go to London).

• Students from England can use the loans calculator on the Student Finance England website
• Students from Wales can go to Student Finance Wales
• Students from Scotland can go to Student Awards Agency Scotland
• Students from Northern Ireland can go to Student Finance Northern Ireland

From 2026, both tuition fees and maintenance loans are expected to increase every year by an inflation measure called the Retail Price Index minus the interest on mortgage payments, or RPIx.

This measure fluctuates, but an increase at its October 2025 rate - when the change was announced - would see tuition fees rise by approximately £400 a year, to more than £9,900.

The government said only those universities which provide strong outcomes for students would be able to charge the maximum amount in England.

Universities which fall below the quality threshold set by the regulator in England, the Office for Students, may also face a cap on the number of students they can recruit.

The tuition fees are paid directly to your university or education provider.

The maintenance loan is paid directly to your bank account in instalments.

Payments are made at the start of each term in England, Wales and Northern Ireland, and monthly in Scotland.

In order to be paid you'll need to register at your university or college. You'll usually do this in the first week of your course, and you may have to take along your student finance entitlement letter.

In England you should get a text from the Student Loans Company a few days before to let you know the maintenance loan is on the way.

You can apply for funding up to nine months after the first day of the academic year for your course.

Depending on where you live, you will need to apply through:

• Student Finance England
• Student Finance Wales
• the Students Awards Agency Scotland, or
• Student Finance Northern Ireland

You are charged interest on the loan from the day you take it out, but the amount varies across the UK.

It is important to understand that the terms and conditions of the loan and repayments can change after you have borrowed the money.

Future interest rate rises apply to all student loans, not just new applications.

For students in England, the interest rate is normally set at the retail price index (RPI) measure of inflation. The rate usually updates every September, but can also change throughout the year.

It is currently 4.3% for anyone who started university in 2023 or later.

Rates for students in the rest of the UK are:

• Wales: up to 7.3% depending on your earnings
• Scotland: 4.3%
• Northern Ireland: 4.3%.

How much graduates pay back depends on how much they earn.

You make one payment to cover both your tuition fees and maintenance loans.

But you do not have to start repaying your loan until you earn a certain amount of money after graduation.

You generally repay 9% of the amount you earn above this threshold.

The threshold for students in England who started university in 2023 or later, and therefore have a Plan 5 loan, is £25,000.

In Wales it is £28,470, in Scotland £32,745 and in Northern Ireland £26,065.

Students who took out a loan in England to start university between September 2012 and July 2023 have a Plan 2 loan.

Plan 2 repayment thresholds are rising from £28,470 to £29,385 in April 2026, before being frozen - instead of rising with inflation - for three years.

You do not have to start making payments until the April after you leave your course.

Payments are made automatically through the tax system.

Some people choose to make extra repayments to clear some or all of their loan early - there is no penalty for doing this.

In some cases graduates have had repayments wrongly deducted from their wages.

For example, they may have had money taken before the April when they become liable, or after their loan had been repaid in full.

Alternatively, their employer may have put them on the wrong repayment plan. Payments may also have accidentally been triggered when graduates earned more than the monthly threshold - perhaps as a result of working extra shifts or getting a bonus - but did not exceeded the annual limit.

These incorrect repayments can be refunded.

Just over £61m was given back to 216,300 customers in the 2023/24 tax year. The average refund was £280.

In May 2024, the Student Loans Company introduced a digital refund service, which was accessed by more than 400,000 people in the first six months.

You can check whether you are entitled to a refund on the SLC website.

Any overpayments you have chosen to make cannot be refunded.

In England, students who started university in 2023 or later will see their loans written off after 40 years, regardless of how much they may still owe.

For students with Plan 2 loans, including in Wales, this happens after 30 years.

It is also after 30 years in Scotland, and in Northern Ireland it is after 25 years.

You still have to repay your student loan if you leave your course early.