How To Pay for Your Studies in the UK with Government Student Loans in 2026.

If your goal is to study in the UK but you are not sure how to pay for your education, this article explains what government student loans are and how they work.

This article describes student loans for undergraduate studies (your first studies at a UK university). For Masters studies (second degree studies in the UK) there is a separate, postgraduate loan, which is described in this article.

Bullet Point Summary of the Article:

    • What you can get: British citizens, pre-settled, settled and leave to remain status holders in the UK can get government loans for studies and for living costs.

    • University costs: Up to £9,790 per year is paid directly to your university.

    • Living costs loan: Up to £10,830 per year (outside London) or £14,135 per year (in London), paid to your personal account. (Note: To be eligible, the majority of your in-person attendance must take place during the week. Weekend-only study is not eligible).

    • Childcare Grant: Parents may get up to £199.62 per week for one child, and up to £342.24 per week for two or more children.

    • Repayment start: Only when you finish studies and start earning over £25,000 per year.

    • Monthly payments: 9% of anything you earn over £2,083.33 in that month. For example, when you finish university and earn £2,166.66 per month, you will pay only £7.50 for your student loans.

    • Pay nothing: If you earn £2,083.33 or less per month.

    • Automatic: Payments are taken from your salary, together with income tax.

    • Interest rate: Tied to the Retail Price Index (RPI) inflation rate for new students.

    • No impact: Student loans don't affect your credit score or your family.

    • Cancellation: Student loans get cancelled after 40 years if unpaid.

    • Moving abroad: Repayment rules change if moving abroad after university.

    • Non-settled/non-citizens: May not get loans and face higher university fees.

    • Masters studies: After your first degree, get another, separate loan for Masters studies.

    • Apply: The quickest and easiest way is via the online application on the government portal.

1. Check What You Can Get

Use UniEdu's Can-I-Apply tool - simply answer a few questions to get information on which government student loans you can apply for to cover the cost of your education and living expenses. In addition you will get a list of universities that might accept you and best match your potential and needs

If you would like to discuss your options, choices, and funding availability in more detail, you can always get in touch with us at any time for quick and friendly advice, we will be happy to help you! 

2. How Student Loans Differ from Normal Loans

Student loans are not like traditional debt, as they are repaid through the income tax system and based on future earnings. Graduates only need to start repaying their loans after finishing university and earning over £25,000 per year. 9% of earnings above this threshold goes towards loan repayments. The more a graduate earns, the more they repay each month. Repayments adjust automatically based on changes in future income, and low earners may not have to repay much or nothing at all.

3. Repayment System

Repayment of UK student loans is income-based and begins once graduates start earning at least £25,000 per year. Repayments are made automatically through the UK tax system, ensuring a smooth and hassle-free process for borrowers. Here are examples of monthly student loan repayments for different income levels:

For someone earning £28,000 per year after university:

A. Calculate the amount earned above the repayment threshold (£25,000): £28,000 - £25,000 = £3,000.

B. Calculate the annual repayment amount: 9% of £3,000 = £270.

C. Find the monthly repayment: £270 / 12 = £22.50.

More examples:

  • Earning less than £25,000/year: £0/month

  • Earning £26,000/year: £7.50/month

  • Earning £30,000/year: £37.50/month

  • Earning £35,000/year: £75/month

  • Earning £40,000/year: £112.50/month

Your loan has an interest rate strictly capped at the Retail Prices Index (RPI) measure of inflation, which is currently 3.2%. Because the government no longer adds an extra "real interest" percentage on top for new students, you will never pay back more than you borrowed in real terms. (Please note: Different, higher interest rates apply to students who started their UK studies in 2022 or earlier).

4. Impact on Credit Score and Family Responsibility

Student loans in the UK do not impact borrowers' credit scores or affect their future loan eligibility. Furthermore, family members are not responsible for repaying the student loans.

5. Loan Forgiveness and Early Repayment

Student loans in the UK are forgiven after 40 years, meaning any outstanding balance at that point is automatically wiped out. Borrowers can also choose to repay their loans early, although this may not be beneficial for everyone, as many students will not fully repay their loans before the forgiveness period.

6. Repayment Rules for Students Moving Abroad

For students who move abroad after graduation, different repayment rules apply. These students must inform the UK government about their earnings, and earning thresholds for repayment may vary depending on the country. It is essential to understand these repayment requirements to avoid any complications.

7. Limitations

Individuals without pre-settled, settled, remain to leave or British citizenship status are normally not eligible for government-funded student loans and may face higher tuition fees (apart from a few exceptions, contact us for details).

Important Funding Note: To qualify for living support and childcare grants, the majority of your in-person attendance must take place during the week (Monday–Friday). Courses attended solely or predominantly on weekends are legally classified as "distance learning" and are only eligible for the Tuition Fee Loan. It is crucial for prospective students to be aware of their eligibility for funding before committing to a university program in the UK.

8. Application Process and Support

The application process for student loans can be complicated, and paper-based application forms are typically a better method to use. To determine eligibility and receive guidance on the application process, contact experts in university applications and student finance, such as UniEdu. Our team can help you navigate the UK student loan system and secure the necessary funding for your education.

9. Loan for Masters studies in the UK

If you would like to study Masters studies in the UK and wanted to get a government student loan to cover the costs of your second degree, another student loan is available for pre-settled and settled status holders in the UK. This loan has different amount, eligibility and repayment rules and these are described in more detail in this article.

Conclusions

The UK Student Loans are a great option for those who are looking to pursue undergaduate studies in the UK. They provide financial support for eligible students, which can be used to cover tuition fees and living expenses. However, it's important to note that there are certain eligibility criteria that must be met in order to qualify for these loans. If you're unsure about your eligibility or have any questions about the loans, it's always a smart idea to consult with expert advisers, such as UniEdu’s. 

We have got over 10 years of experience in supporting UK Student Loan applications and can provide you with personalised guidance and support, help you navigate the application process, understand the terms and conditions of the loans, and ensure that you have all the information you need to make an informed decision about your studies in the UK. 

We look forward to hearing from you!