Student finance: A guide for new students

Applying for university is an exciting time – discovering a new city, connecting to new people, getting ready for the next chapter. But for some it can be a worrying and confusing process, especially when looking at the costs of studying in the UK.

Student finance, bursaries and scholarships help cover the costs of tuition and living, but it’s important to figure out exactly how much university is going to cost you and how much you need to live on.

Take a look at our simple guide to understand the costs of going to university, what student finance can cover and how to apply.


How much does it cost to go to university in the UK?

Annual tuition fees will change depending on where you’re from in the UK as well as where it is you’re planning to study.

Some universities will also have their own set fees, often when the degree includes a placement year or sandwich year.

According to UCAS, the average annual university tuition fees are:

  • If you're from England: up to £9,250 per year when studying in England, Wales, Scotland or Northern Ireland
  • If you're from Scotland: free if you're studying in Scotland; up to £9,250 per year in England, Wales or Northern Ireland
  • If you're from Wales: up to £9,000 per year if you're studying in Wales; up to £9,250 in England, Scotland and Northern Ireland
  • If you're from Northern Ireland: up to £4,395 per year if you're studying in Northern Ireland; up to £9,250 in England, Wales or Scotland.

How much do you need to live on at university?

Alongside tuition fees, it’s important to factor in the living costs you will have to cover as a university student.

Save the student surveyed over 100 students and found that the average cost of living for a university student in the UK in 2021 was around £795 per month, which is roughly £183 per week.

As this may be your first-time budgeting or looking after your own finances, it’s important to factor in all potential expenses, so you feel comfortable knowing you can cover all expected – and unexpected – costs.

One of the biggest expenses outside of tuition fees is accommodation.

Make sure you’ve done your research into how much it’ll cost you over the year, based on the city you’re moving too.

Utility bills are another expense you’ll need to consider when choosing accommodation. All bills are included in the weekly price at iQ to help make things a bit easier.

However, HMO properties (renting a property from a private landlord) may require additional budget for energy, water, internet, insurance and more. So, depending on what type of student accommodation you choose – halls or HMO – you will need to factor in different costs and bills.

Food and shopping, transport, freshers’ events, books or course materials and social spending money will all need to be included in your budget.

Additionally, phone contract, gym membership, Netflix accounts and all other monthly payments will need to be accounted for.

While the expense may seem overwhelming, student finance exists to help cover those costs with a loan.

A blonde-haired student sits behind her laptop

What student finance loans are available?

Student Finance England offers two different undergraduate loans for tuition and maintenance:

Student Finance Tuition Loan

This loan will cover your annual tuition fees up to the maximum of £9,250 and is available to all students in the UK. The loan goes directly to your university, so you don’t have to worry about making the payments yourself.

Student Finance Maintenance Loan

This student loan is to cover all your living costs and is paid directly into your bank account in three instalments across the year – one per academic term. It is entirely up to you how you want to spend the money.

Unfortunately, many students find this loan does not cover the full cost of living, so it is important to have a plan of how to fund the remaining costs, whether that’s parents’ help, bursaries or a part-time job.

How is the maintenance loan amount calculated?

The maintenance loan is calculated by your family’s household income. According to student finance, the maximum amount you can apply for is based on your living situation whilst studying.

  • If you’re living at home, you can get the maximum loan of up to £7,987.
  • If you’re living away from home, outside London, you can get the maximum loan of up to £9,488.
  • If you’re living away from home, inside London, you can get the maximum loan of up to £12,382.
  • If you spend a year of a UK course studying abroad, you can get the maximum loan of up to £10,866.

You can find out how much you could be entitled to for 2021/22 by using the maintenance loan calculator.

How do student finance loan repayments work?

If you are worried about the loan repayments or how much student finance takes per month, let us reassure you - student finance works a little differently.

Unlike other loans, student loans are not based on what you are currently able to pay back, but on your future income. All repayments are calculated on what you earn after university, rather than the amount you borrowed.

Until you earn over £26,575, you do not have to pay anything back. And, if you do not earn over £26,575 at any point in your career, you never have to pay the student loan back.

Once you earn over the £26,575 threshold, you will start to pay back 9% per year on the additional income. If you earn £29,525 per year, £3000 over the threshold, you will pay back 9% of £3000 per year – or £22.50 per month.

Additionally, all loans are written off after 30 years. If you haven’t paid it back by then, your student loan will be cancelled, regardless of how much or little you’ve repaid.

Two students sit across from each other at a round table, one student is taking notes and one is on a laptop.

How do I apply for student finance in the UK?

To apply for student finance, you can either submit an application online or by post (unless you live in Scotland, which is online only).

To support your application, you may need to provide evidence, like your birth certificate or passport, in which case an online application is easier as you won’t need to post any sensitive or important documents.

You do not need a confirmed university place to apply for student finance, so don’t worry about waiting until results day if you have a conditional offer in place.

You can even apply if you don’t know what course or university you want to choose – it’s better to apply as soon as possible.

What do you need to apply for student finance?

Before you submit an application, you should have the following details ready to go:

  • A UK passport
  • Your National Insurance Number
  • Your email address
  • Your bank account details
  • Your household income information from your parents or guardians
  • Your school, university and course details – if you’ve made that decision.

How long does an application take?

A student finance application can take 6-8 weeks to process, sometimes longer if you apply during peak times such as clearing or around the deadline.

You can view the status of your application online, but Student Finance England will contact you if they need any additional information. You will not need to contact them.

When is the student finance deadline?

The sooner you apply for student finance the better, as you want to make sure you have the money available to you at the start of the term.

Usually, the deadline is around the end of May. You are still able to apply after that date, but you may not get the money in time for the start of term – which could impact accommodation payments or cause additional stress as you start university.

According to the Student Finance website, you can still apply for student finance up to 9 months after the first day of the academic year of your course.

Student finance: key takeaways

  • Student finance will cover up to £9,250 of your tuition fees and will manage the payments directly with the university
  • You can also apply for a maintenance loan of up to £12,382, depending on your living situation during university, which will be paid directly to you
  • Student finance repayments are based on your future income and you don’t have to pay anything back until you earn over £26,575, regardless of how much you borrowed
  • You can apply before you know what course or university you want to study at, but to guarantee the money in time for the start of term you should apply before the deadline at the end of May.

For more tips and tricks on student life, such as how to open a student bank account or how to earn cashback with iQ, take a look at our Reading Room.


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