The Salary Calculator

Student Fees, Finance, and Funding: What You Need to Know 

by Madaline Dunn

With the new school year commencing, millions of students across the country will be mulling their university choices — and how they’ll fund their education.

But while record numbers are being accepted into universities and colleges this year, research shows that students are concerned about costs.

At the same time, recent data from the Higher Education Policy Institute (HEPI) shows that misconceptions about student loans abound.

To clear up the confusion, this week at The Salary Calculator, we’ll answer:

• How have loans, fees and thresholds changed?
• How much can students borrow?
• Is student finance enough to cover costs?
• How can students financially prepare for university?

How have loans, fees, and thresholds changed?

Over the last two decades, a lot has changed across student fees, finance, and funding. With tuition fees hitting £9,535 this year, the days of the £1,000-a-year courses seem but a distant memory.

Meanwhile, maintenance grants, which previously offered students up to £3,387 a year, were scrapped back in 2017 and replaced with maintenance loans for living costs.

And interest rates? That depends on your plan. Currently, it’s:

• 3.2% if you’re on Plan 1 (you started your course before 1 September 2012)
• 3.2% to 6.2% based on annual income if you’re on Plan 2 (you started your course between 1 September 2012 and 31 July 2023)
• 3.2% if you’re on Plan 5 (you started your course after 1 August 2023)
• 6.2% if you’re on a Postgraduate Loan plan

That said, you’re charged interest from the day your first payment is made, regardless of your plan.

Your plan will also determine the salary threshold at which you’ll start repaying your loan.

For Plan 1, you’ll start paying back your loan at £26,065. With Plan 2, this is £28,470, and for Plan 5 it’s £25,000.

For Plans 1, 2 and 5, you’ll pay 9% of your income.

For postgraduate loans, the threshold is £21,000, at which point you pay 6% of your income over the threshold.

If you would like to see how much this will take off your pay each month, use The Salary Calculator‘s Student Loan options to get an illustration.

For those commencing university in 2025, loans will be wiped after 40 years — up from 30. However, many students will never pay back their loans in full. For full-time undergraduates starting their courses in 2024/25, government forecasts are that this figure stands at just 56%.

How much can a student borrow?

While tuition loans cover your course fees and are paid directly to your university, maintenance loans are means-tested. When you apply, your household income and where you live and study will be factored into how much you’ll receive.

For those from households with an income of £25,000 or below and living at home, you’ll be entitled to £8,877. This rises to £10,544 if you live away from home outside London.

Earlier this year, figures from the Student Loans Company (SLC), the organisation which administers loans and grants to students in colleges and universities, revealed that in 2024-25 the amount of debt students graduated with was up nearly 10% from the year prior, reaching an average of £53,000.

Indeed, this echoes numbers obtained by the BBC last year, which found that 1.8 million people owe at least £50,000 in student loans, and an additional 61,000 have “balances of above £100,000.”

Despite this data, a recent report from King’s College London found that people “underestimate” the true level of debt students take on by £10,000, with average student debt exceeding the US by “nearly £6,000 more than the equivalent figure in the US.”

Is student finance enough to cover costs?

But while student debt is increasing, research suggests that students are still struggling. According to the Centre for Research in Social Policy (CRSP) at Loughborough University, the maximum maintenance loan covers “only half of what is needed for a minimum socially acceptable standard of living.”

“The financial landscape facing current students is among the trickiest ever”

Findings from the study, conducted with HEPI and TechnologyOne, revealed that for a three-year course, students would need £61,000, increasing to around £77,000 in London.

“The financial landscape facing current students is among the trickiest ever. Our long-running Student Money Survey has routinely found that Maintenance Loans are not enough to live on, but in recent years, the situation has become significantly worse,” said Tom Allingham, student finance expert at the money website Save the Student.

Allingham shared that Save the Student’s latest survey found that funding now falls short of living costs by an average of £504/month. This, he said, is over double the shortfall the organisation discovered in 2020 (£223).

“As a result, students are having to cut spending on even the most basic of necessities, with 9% telling us they’d used a food bank in the past year, and 67% saying they skip meals at least some of the time,” added Allingham.

Leacsaidh Macdonald-Marlow, student voice assistant at Student Minds, echoed this, noting that the current financial landscape, in particular the cost of living crisis, is putting “immense pressure on students.”

“A majority of students now do part-time or full-time work alongside their studies in order to afford necessities like rent, and this affects overall student wellbeing, time management, energy, and subsequently academic stress and performance,” noted Macdonald-Marlow, who said that maintenance loans fail to provide students with “any real sense of financial security,” across almost all socioeconomic backgrounds.

“Students also have a lot of worries surrounding debt”

Indeed, earlier this year, a survey published by Advance HE and the Higher Education Policy Institute (HEPI) found that over the last few years, there’s been, what they called a “dramatic rise” in the number of full-time students working during term time. In 2025, the figure sits at just under 70%, up from 56% the year before and 42% in 2020.

“Students also have a lot of worries surrounding debt, and often feel ashamed or unable to talk to anyone about these anxieties, which only compounds financial stress and a desire to work even longer hours during term-time,” commented Macdonald-Marlow.

Allingham says that a lack of funding underpins this financial struggle. He explained that, in recent years, funding has fallen “drastically short” of inflation, amounting to “huge real-terms cuts” of up to £1,906 in 2024/25, according to the Russell Group.

“We’re urging the government to increase Maintenance Loans above and beyond the rate of inflation, to restore funding to previous levels and prevent students from being condemned to a never-ending cost-of-living crisis,” said Allingham.

Meanwhile, Macdonald-Marlow noted that, as outlined in its Student Mental Health Manifesto, Student Minds recommends the reintroduction of maintenance grants, increased maintenance loans and a fairer repayment scheme.

How can students prepare financially for university?

But, with no current plans to increase the maintenance loan, or indeed reintroduce maintenance grants, how can students best financially prepare for university next year?

“The first thing any student should do to get their finances in order is open the right student bank account,” said Allingham, who explained that instead of being swayed by sign-up freebies, students should prioritise those accounts with interest-free overdrafts instead.

“This is probably the safest and most easily-accessible form of emergency cash at uni, and will be far more useful than any freebie a bank can offer,” added Allingham.

Meanwhile, Leon Ward, CEO of financial education charity Money Ready, recommended that students create a clear picture of their finances. “Work out what you need to spend money on (rent and food, for instance) vs what you’d like to spend money on (such as new trainers) and check that against the money you have coming in.”

Once students understand their financial situation, Ward suggests looking at ways to fill any gaps. “If you need to spend less, check out special student discounts on sites like Student Beans, UniDays or NUS Extra, and get savvy with meal-planning to avoid food waste. By budgeting like this, you’ll enjoy your uni experience without getting into too much debt.”

The money charity provides guidance on this via the hashtag #GetUniReady on its socials and website.

Alongside bank accounts and budgeting tips, Allingham advises that prospective students should also look into bursaries, scholarships and grants to see if they’re eligible for any free cash.

“Despite what many people think, this money isn’t just reserved for those with the highest grades, from the lowest-income backgrounds or who excel in a particular subject,” he explained, adding that there are funds for all kinds of “unusual reasons,” including being a vegetarian or having the surname ‘Graham.’

The Student Minds website similarly offers advice on how students can access additional financial support, such as bursaries or hardship funds.

And, for those already eyeing part-time job opportunities, Macdonald-Marlow recommended looking within your university or Students’ Union, noting that jobs are often advertised via the SU website and/or Unitemps.

“These employment opportunities are built for students, offering hours that fit around your university work, and paying fair wages,” she added.

Tags: student finance, student loans, tuition fees

Guidance for university students during the cost of living crisis

by Madaline Dunn

As the UK enters a recession, inflation rises, and the cost of living soars, times are tough, and research shows that students in higher education are increasingly feeling the pinch. Research from Unite shows that around two-thirds of students are now worried about the increased cost of living, and more and more are either considering or proceeding with dropping out.

Recently, a Department for Education (DoE) spokesperson said that it is responding to the crisis by increasing the amount students can access through loans and grants for living and other costs and cited the work of universities in this area. However, many students and those working within education argue that more help is needed and are pushing for more resources to become nationally available. The UUK, a collective of 140 universities, has specifically called on the government to do more to help universities support students.

At The Salary Calculator, we understand how stressful it can be trying to juggle education and financing your day-to-day, so, below we’ll explore:

• Some of the context around student finances right now
• The financial support and advice currently available and how to access it
• Tips to help you stretch your loans and grants

The rise in students struggling with the cost of living crisis

There are no two ways about it, students are really feeling the brunt of the cost of living crisis, and the implications are far-reaching. Working-class students are already underrepresented within higher education, and the current crisis threatens to widen the gap. Figures from the Student Loans Company in September reveal that almost 40,000 students in England, Wales and Northern Ireland permanently withdrew from their courses and stopped receiving student loans by the end of August.

It’s no wonder so many are finding university to be financially unviable, with a recent survey published in July finding that 11% of students were using food banks, with one-third having to rely on credit cards to survive. Moreover, while working to support one’s studies is nothing new, studies show that students are being forced to work far beyond the recommended 15 hours a week, with 9% of students working 21-30 hours a week and 11% working over 31 hours. Moreover, Unite has outlined that around one-third of students are having to increase their working hours just to stay afloat.

What financial support is available and how can you access it?

On the 11th of January 2023, the government announced that it would provide an additional £15 million in hardship funding this financial year to enable universities to better support students facing financial strain. Likewise, the government outlined that loans and grants supporting undergraduate and postgraduate students will be increased by 2.8% for the 2023/24 academic year, while university tuition fees will remain frozen at £9,250 for the next two years.

In addition to this, the 24 Russell Group universities recently announced a pledge to inject tens of millions more in financial support to help students with the rising cost of living, and match the UKRI uplift to its minimum 2022-23 postgraduate research stipends.

But, what does this mean in real terms? Well, if you’re struggling with finances at university, you may be eligible to access your university’s hardship fund. Eligibility is dependent on a number of factors, which we’ve outlined below:

• You’re a student with children or a single parent,
• You’re a student from a low-income family,
• You’re a student that is a ‘care leaver’,
• You’re a mature student with existing financial commitments ,
• You have a disability,
• You are homeless or living in a foyer.

Find out more about accessibility to hardship funds here.

There are other measures being brought in by universities, and these offerings vary from institution to institution. Durham, for example, is offering students free breakfasts while eligible households at York are being offered help with energy bills. The University of Wales Trinity St David (UWTSD) is offering meal deals for students in the university canteen, for example, soup and a roll for £1, and a food hub offering items for free for students or staff who need help with “no questions asked.”

Alongside hardship funds and student finance, you should check to see whether you’re eligible for other forms of scholarships, bursaries and grants. Scholarships are available to high achievers but are also awarded based on gender, ethnicity, background and disability. In the case of the latter, there is the Disabled Students’ Allowance. You can also get a scholarship for:

• Being vegetarian or vegan via The Vegetarian Charity’s grant,
• Being talented at eSports at the University of Roehampton,
• Studying Welsh through the Coleg Cymraeg Cenedlaethol scholarship.

To read more about the different loans, grants, bursaries and scholarships available, head over here.

Tips for stretching loans and grants

Once you’ve managed to access the grants, loans and scholarships you’re eligible for, you may find that you’re still struggling with your finances, and in this case, below, we’ve outlined some helpful tips to help you stretch your money a little further.

Groceries are undeniably expensive right now, so making savings where you can is helpful. Luckily there are a number of sites that offer either reduced or free food. Both ​​Olio, and Too Good To Go, are good zero-waste apps to check out. Likewise, check to see if there are any food waste supermarkets in your area. You can also check what food banks are available to you locally by searching on the Trussell Trust’s website.

When it comes to planning your week and making sure you keep costs as low as possible, meal plans can be really helpful. This way, when you go out to your food shop, you have a clear idea of what you need to buy and how much it’ll cost, saving you a lot of hassle and money.

Another tip for finding cash when things are tight is to look into selling items that you don’t use or need anymore. Sometimes we can surprise ourselves with the amount of stuff we have that’s just gathering dust. Facebook Marketplace, eBay, Gumtree, Depop, and Vinted are some of the most popular sites for doing this.

It could also be beneficial to look into switching to a better student bank account because there are lots that offer lots of extras, such as free cash and railcards (which definitely can’t hurt if you’ve seen the price of train tickets recently). Money Saving Expert is a good site to check out if you’re looking to compare and contrast. Likewise, using a student bank account often means you’ll have access to a 0% overdraft, and this can act as a buffer when things get tough.

That said, it can be easy to slide into debt when money is tight. With around 27% now using credit cards to help with student life, there’s always a risk of not being able to pay back what you’ve taken out and that can come with a lot of stress. Don’t face this alone. There are a number of debt advice charities out there that can help, including:

• StepChange,
• National Debtline,
• Debt Advice Foundation.

Tags: cost of living crisis, debt, Financial aid, student finance, student loan