Student Finance Explained: A Guide for 2026 Applicants
If you are applying to university for the 2026/27 academic year, you are entering a new era of student finance. While the headlines often focus on 'debt', the system actually functions more like a graduate payroll tax. This guide covers what you'll borrow, how repayments work under Plan 5, and where to get help.
✅New for 2026: tuition fees
Tuition fees in England are rising to £9,535 for the 2026/27 academic year, the first increase in eight years.
The Two Main Loans
When people say "Student Loan," they are usually referring to two separate payments bundled together.
1. Tuition Fee Loan
This covers the cost of your course. For 2026/27, universities in England can charge up to £9,535 per year. This money is paid directly to the university, you never see it, but it is added to your total debt.
2. Maintenance Loan
Paid directly to you into your bank account to cover rent, food, transport and books. The amount depends on where you live and your household income.
Money you'll likely borrow
The basics: tuition (paid to the university) and maintenance (paid to you). For England, tuition can reach up to £9,535/year and maintenance depends on your household and where you live.
If you're planning postgraduate study, expect separate postgraduate loans which sit in addition to undergraduate plans.
The “Hidden” Parental Contribution
- The Maintenance Loan is means-tested: the government assesses your parents' (or partner's) household income to decide how much to lend you.
- That means if household income is high, the loan amount is reduced, effectively expecting a parental contribution.
⚠️Important
If your household income is above £25,000, the government reduces your maintenance loan amount, assuming your parents will contribute the difference. This isn't always made clear to families and can leave students short of cash.
Example: a student living away from home outside London might receive the maximum maintenance if the household earns £25,000. If the household earns £60,000, their loan could be cut significantly, leaving a gap of thousands per year.
Repaying Your Loan: Introducing Plan 5
Threshold
£25,000
Repayments start here
Rate
9%
Of earnings above threshold
Interest
RPI Only
Matches inflation
Term
40 Years
Until write-off
Important links
- Plan 5 (2023+ England), what changed for the newest cohort
- How Student Loans Work, high-level primer
- Calculators, model realistic outcomes
Plan 5 vs Previous Years
Plan 5 lowers the repayment threshold and lengthens the term compared with Plan 2, meaning more graduates will repay in full.
| Feature | Plan 5 (You) | Plan 2 (Pre-2023) |
|---|---|---|
| Repayment Threshold | £25,000 | £28,470 (approx) |
| Repayment Term | 40 Years | 30 Years |
| Interest Rate | RPI (Inflation Only) | Up to RPI + 3% |
Real-World Repayment Examples
Focus on the monthly impact. You pay 9% of everything you earn above £25,000 (≈ £2,083/month).
📊The Graduate Starting Out
💰The Established Professional
🎓The High Earner
Run your own numbers with the 2025 Calculator
Model your likely repayments on Plan 5 using realistic salary paths.
Summary: Should You Go?
University is expensive. Plan 5 means you may be repaying for much of your working life (up to 40 years). However, loans remain widely available and offer protections if you don't earn a high salary.
Tuition fees are £9,535, paid directly to your uni.
Maintenance loans are means-tested; check if your parents need to contribute.
You repay 9% of earnings above £25,000.
The loan is wiped after 40 years if not paid off.
It does not affect your credit score.
If you'd like personalised scenarios, run our Plan 5 calculator or read the full Plan 5 policy pages.