Money
Loans, maintenance, budgeting, and how to leave university in the strongest financial position possible.
Most students arrive at university with a vague sense that there are loans involved and that they'll worry about it later. This guide gives you the actual numbers — what you borrow, what it costs, what you get back, and how to manage your money so that three years of student life doesn't become a financial disaster you spend a decade recovering from.
Before anything else, you need to know which student loan plan applies to you. The plan you are on determines your repayment threshold, interest rate, and how long you repay. They are meaningfully different.
| Plan | Who It Applies To | Repayment Threshold | Interest | Written Off |
|---|---|---|---|---|
| Plan 1 | English/Welsh students who started before 2012 | £26,065 (2025/26) | RPI or Bank of England base rate +1% (whichever is lower) | Age 65 or 25 years |
| Plan 2 | English students who started 2012–2022 | £29,385 | RPI (up to RPI+3% while studying) | 30 years after repayment starts |
| Plan 5 | English students starting from 2023 onwards | £25,000 | RPI only | 40 years after repayment starts |
If you are starting university now or considering it, Plan 5 is your plan. It has a lower repayment threshold than Plan 2 (meaning you start repaying at a lower salary), but lower interest. The most significant difference is the write-off period: 40 years, not 30. For a graduate starting repayments at 22, that means the loan is written off at 62.
Under all plans, you repay 9% of earnings above the threshold — nothing on earnings below it. If you never earn above the threshold, you never repay a penny. Most people will never repay the full balance. For most graduates, the loan functions as a graduate tax, not a conventional debt. This changes how you should think about it.
There are two separate loans most students take out. They work differently and serve different purposes.
The Tuition Fee Loan pays your university directly. You never see this money. For 2025/26, tuition fees in England are £9,535 per year, rising to £9,790 for 2026/27. For a three-year degree starting in 2025, total tuition borrowing is approximately £28,600 — paid directly from the government to your university.
The Maintenance Loan is paid to you, in three instalments, to cover living costs. The amount you receive depends on where you study (London is higher) and your household income. As of 2025/26, the maximum maintenance loan for students outside London is £10,227 per year; for students in London it rises to £13,762 (living away from home). Exact figures vary slightly depending on living situation — check gov.uk/student-finance for the most current rates.
The maintenance loan is almost never enough to cover all living costs without additional support. Here is a realistic breakdown of what student life costs outside London:
Per month. University halls tend to be at the lower end; private rentals vary widely by city.
Per month. Cooking rather than eating out is the single biggest lever you have on this.
Per month. A 16-25 Railcard (£35/year) gives you 1/3 off all rail fares — worth it if you travel home.
Per month. The range here is entirely within your control and is where most students overspend.
The gap between your maintenance loan and actual living costs is typically covered by a combination of parental support, part-time work, or savings. Be realistic about which of these applies to you before you arrive.
University is the first time most people manage their own finances without oversight. The habits you build here — good or bad — tend to stick.
Every major UK bank has a student current account. Most offer an interest-free overdraft of £1,000–£3,000. This is genuinely useful as a buffer — but treat it as an emergency reserve, not spending money. The overdraft must be cleared shortly after you graduate, and the interest rates on unpaid overdrafts are steep.
Monzo and Starling both provide real-time spending breakdowns and are free to use. Knowing where your money goes is the foundation of every other good financial decision. You cannot manage what you cannot see.
Working 10–15 hours per week does not damage academic performance — research consistently shows students with part-time jobs manage their time better and often get comparable or better grades than those without. Aim for something on or near campus: university libraries, cafeterias, and student unions frequently hire students on flexible contracts.
A valid student email address or NUS/TOTUM card unlocks significant savings that most students significantly underuse. The most valuable:
Amazon Prime Student — 6 months free, then 50% off. Spotify/Apple Music — roughly 50% off. Microsoft Office 365 — free via most universities. Adobe Creative Cloud — ~60% off. Railcard — 1/3 off all rail (£35/year). Unidays and Student Beans — aggregators for hundreds of retail, tech, and food discounts. Check them before you buy anything.
If you have any surplus income — from work, gifts, or parental support — the most powerful thing you can do with it at 18–21 is put it into a Stocks and Shares ISA. You can invest up to £20,000 per year with no tax on gains or income.
The numbers are stark. £1,000 invested at 19 at a 7% average annual return becomes approximately £14,000 by retirement — without adding another penny. The same £1,000 invested at 25 becomes roughly £9,000. Those six years cost you £5,000 in compounding. Time in the market is the most powerful variable available to you, and you have more of it right now than you ever will again.
The student loan is not the financial emergency it is often presented as. For most people it functions as a graduate tax — manageable, background, and written off eventually. The real financial decisions at university are smaller and daily: whether you cook or eat out, whether you use your overdraft as a buffer or a float, whether you start investing even a small amount early. Get the small habits right and the big numbers take care of themselves.
Two levels, ten questions each. See how much you took in.