While at university, your young person will face two main costs: tuition fees and living expenses. Fortunately, most students can cover these using two primary student finance loans. Here is everything you need to know about how the system works and what your role looks like.
The Tuition Fee Loan
For UK students, an undergraduate degree in England currently costs up to £9,790 per academic year (for 2026 entry).
What it covers: the full cost of the course.
How it works: your young person applies for this loan through Student Finance, and the money goes directly to the university.
Repayment: they only begin paying this back after they graduate and earn over the repayment threshold.
The Maintenance Loan
The Maintenance Loan helps your young person cover daily living costs like rent, food and books. Unlike the tuition loan, this money goes straight into their bank account in three instalments per year.
Understanding the parental contribution
The government means-tests the Maintenance Loan. They will look at your household income to decide how much to lend. The more you earn, the less the government provides in a loan.
Estimated annual Maintenance Loans (2026/27)
Based on a student living away from home, outside of London.
Parent tip: Student Finance usually looks at your income from two tax years ago. However, if your income has dropped by 15% or more since then, you can ask for a 'Current Year Assessment.' From 2026/27, anyone who meets the definition of a care leaver automatically qualifies for the maximum loan, regardless of parental income.
How repayments work
One of the biggest concerns for parents is student debt. However, student loans function more like a graduate contribution than a traditional bank loan.
Your young person would pay back both the Tuition and Maintenance Loans as one single deduction from their salary.
The threshold: They only pay back 9% of what they earn above £25,000 a year.
Automatic payments: If they are employed, HMRC takes the payment automatically from their payslip, just like tax. If they aren't earning over £25,000, they pay nothing.
The 40-year rule: Any remaining balance is completely cancelled after 40 years, regardless of how much they have paid back.
Monthly repayment examples based on income
£25,000 p.a.
Per month: £0
£28,000 p.a.
Per month: £22
£35,000 p.a.
Per month: £75
£45,000 p.a.
Per month: £150
Key considerations when choosing a course
Always check the specific details for the course they choose. Programmes with a foundation year, a condensed fast-track structure, or an integrated master’s can change how Student Finance calculates and pays the loans.
If their chosen course includes an optional placement year, they will likely pay a significantly reduced ‘placement fee’ to cover admin support and tutor visits. However, the Maintenance Loan will likely also be at a reduced rate for that year, particularly if they are on a paid placement. Students on specific unpaid placements (such as in the NHS or certain public sectors) may still be entitled to their full, means-tested loan.
