Student Loans

All information correct from February 2023

You’ve battled your way through the UCAS applications, and now it is time to apply for student loans, also known as, student finance. Often, it seems like a minefield with many ambiguous terms, so we have created this student loan guide to help you out.

What is a student loan?

All student loans come from the non-profit, government-owned, Student Loans Company that is responsible for distributing loans and grants to colleges and universities.

Unlike typical bank loans, whereby you are expected to pay an agreed sum monthly; the student loans are already paid by the Student Loans Company, once your application has been processed.

The Student Loan Company covers two areas:

Tuition loan

Full-time students can be eligible for a loan of up to £9,250.

Since 2012, part-time students can be entitled to a loan from £4,500 to £6,935 (as long as they are studying 25% of the course.

Anyone who is studying at least 25% of a full-time course is considered to be full-time students, meaning they are eligible for the maximum amount.

Students starting an accelerated course can be eligible for a higher amount of £11,100.

Postgraduate students can apply for loans up to £10,906. Students studying for a doctorate can apply for loans up to £25,000.

Maintenance loan

In essence, full-time and part-time students can apply for living costs to help pay for rent, food, bills, travel, for example.

The amount you are eligible for depends on a few variables. Such as if you are living with or away from parents. And, if you will be studying in London, outside London or abroad.

Below is a table showing the maximum amount you can apply for.

Academic Year	Living With Parents	Living Away From Home	Living Away from Home (London)	Living Away (Abroad)
2021/22	£8,171	£9,706	£12,667	£11,116

If your family owns below £25,000, then you are entitled to the maximum amount, but if your family owns over the threshold, then there are reductions.

The Student Finance Calculator is a free tool on the GOV website which calculates how much you would be eligible for.

When do you start paying off your student loans?

For both your tuition and maintenance loan, you can only start making repayments

after graduation, which for most will be in April.

However, you will only start making payments for your Plan 1 and Plan 2 loans once you earn over their thresholds of £1,682 and £2,274 respectively (before tax and other deductions). In which, 9% will be deducted from your salary.

The repayments will be taken directly out of your salary, and the amount deducted will appear on your payslip. Therefore, you will never have to worry about keeping money aside to make those monthly payments!

If you are self-employed

You will make your repayments at the same time you do your tax return. HM Revenue and Customs (HMRC) will calculate how much you need to pay.

If you go abroad for more than three months

Firstly, you will need to inform the Student Loans Company if you are abroad for more than three months. They will decide if you need to make repayments and how much.

Typically, the rules remain the same and are dependent on the payment plans for that country.

If you lose your job or your salary decreases

If you lose your job, then any repayments to the Student Loan Company will freeze. If your salary falls below the threshold, then your repayments will freeze as well.

If repayments are made by mistake

You could claim for a refund if your income for a month in less than £1,682 (Plan 1), £2,274 (Plan 2) or £1,750 (postgraduate loan). You will need to call Student Loan Company with your customer reference number on 0300 100 0611 or +44 (0) 141 243 3660 (outside the UK).

Student loan Interest

Currently, the interest while studying is 5.4%, which is based on the Retail Price Index (measures different prices and incomes including pensions, benefits and tax allowances) plus 2.4%.

However, your repayments do not change regardless of how much interest is added to your student loan. Therefore, despite adding thousands to your overall amount, it will not impact on your spending power.

What happens if you don’t pay off your student loan?

If after 30 years of graduation you have been unable to pay your off your loan, it is wiped clean with no implications. However, the threshold for these change so you will need to keep yourself updated.

Student Loans

To apply for your student loans, including the maintenance loan, then you will need to head over to the GOV UK wesbite.

When do you need to apply for a Student Loan?

You can apply for loans up to 9 months after the start of the academic year for your course. If your course starts between 1st August - 31st December, you are recommended to apply by 31st May.

What documents will you need when you apply for a student loan?

When applying for the first time, you will need to include your valid UK passport details in the application.

If you do not have a UK passport or it has expired, then send your original birth or adoption certificate instead. Don’t worry, you will get these back!

If you are applying for a higher maintenance loan, then your parents will need to support this claim by showing proof of their household income. This will be asked during the application process.

While you’re studying, perhaps you should get a part-time job to fit around your studies. You should also start figuring out your student budget. Have a look at our guide on how to get a job for some ideas and tips.