How do student loans work in the UK and when are they written off?

The UK’s student loan system has come under renewed scrutiny as concerns grow about affordability and long-term repayment, especially for graduates on Plan 2 loans. Personal finance expert Martin Lewis has criticised the government’s decision to freeze repayment thresholds, calling it “not a moral thing to do”.

According to the UK government, student loans are designed to support access to higher education and are typically divided into two parts:

• a tuition fee loan
• a maintenance loan to help cover living costs

Most students are eligible for a tuition fee loan, which covers the full annual cost of their course. Current tuition fee levels across the UK are:

• England and Wales: £9,535 per year
• Northern Ireland: £4,855 for Northern Irish students and £9,535 for other UK students
• Scotland: Free for most Scottish students, and £9,535 for students from the rest of the UK

The maintenance loan is intended to help with accommodation, food, books and other essential expenses. It is means-tested, meaning the amount a student can receive depends on household income. Additional support may be available for students with disabilities or dependent children.

Students under the age of 25 who have no contact with their parents can apply as estranged students, in which case parental income is not taken into account.

According to research published in May 2024 by the Higher Education Policy Institute, maintenance loans in England typically cover only around half of students’ living costs, with the proportion even lower for those studying in London.

How much can students borrow for living costs?

Maintenance loan amounts vary depending on where students live and study.

For the 2025–26 academic year, undergraduate students in England and Wales will be able to borrow more for day-to-day living costs than in previous years.

For example, students from England living away from home outside London will be eligible for a maximum maintenance loan of £10,544, up from £10,227.

The government has also announced the reintroduction of maintenance grants of up to £1,000 per year for students from lower-income households in England who are studying courses aligned with its Industrial Strategy. These grants will be introduced from 2028, with the list of eligible courses still being finalised.

In other parts of the UK:

• Students from Wales studying away from home can borrow up to £11,345, and may also be eligible for non-repayable maintenance grants.
• In Scotland, the maximum annual maintenance loan for under-25s is £9,400, alongside a range of bursaries and grants.
• Students from Northern Ireland studying away from home can borrow up to £8,132, or £11,391 if studying in London.

How will tuition fees and maintenance loans change?

From 2026, both tuition fees and maintenance loans are expected to rise annually in line with RPIx, an inflation measure based on the Retail Price Index excluding mortgage interest payments.

Based on the rate announced in October 2025, tuition fees could increase by approximately £400 per year, pushing the maximum fee to over £9,900.

The government has said that only universities in England delivering strong outcomes for students will be permitted to charge the maximum fee. Institutions that fall below quality thresholds set by the regulator, the Office for Students, may also face limits on student recruitment.

Source: BBC News