Best loans for education costs

The funding picture for 2025/26

Higher education is a major investment, so it pays to understand how the UK system actually works before you choose how to fund it. For students in England, the headline figure in 2025 is the tuition fee cap rising to £9,535 for full-time undergraduate courses. That is a modest 3.1% uplift, but it still shapes the total cost of study and what you will borrow. Tuition Fee Loans cover this amount and are paid directly to your university, meaning your day-to-day budget is more about living costs than lecture halls.

Living costs are where Maintenance Loans matter. If you study in London, the maximum in 2025 is £13,762 a year. Outside London the top amount is £10,544 when living away from home, or £8,877 if you stay with your parents. These are upper limits - what you actually receive depends on household income and where you live. For example, a household income of around £35,000 might translate to roughly £7,387 if living at home, up to about £12,231 for London study. Payments land in your bank account at the start of each term, so planning monthly cash flow is essential.

Repayments are income-linked rather than time-linked, which is reassuring for early careers. Most new English undergraduates are now on Plan 5 loans. You repay 9% of anything you earn above £25,000 a year, collected automatically via PAYE. Fall below the threshold and repayments pause. From September 2025, interest on undergraduate loans is set at the Retail Prices Index - currently 3.2% - or the lower of RPI and Bank of England base rate plus 1%. Some Plan 2 borrowers can see higher rates based on earnings, but most undergraduates will track close to inflation in 2025/26. The result is a system designed to be affordable when your income is lower and proportionate as your pay grows.

Across the UK, fee rules differ. England caps at £9,535 full-time and £7,145 part-time. Scotland offers free tuition for eligible Scottish students at Scottish universities. Wales caps at £9,250, and Northern Ireland caps local fees at £4,710 with £9,250 for study elsewhere in the UK. If you are weighing up where to study, these national differences can materially alter your total borrowing.

Short, sharp takeaway: your tuition is typically fully covered by a loan, and your living costs are partly supported by a means-tested maintenance loan. You then choose whether to bridge any gap with savings, scholarships, part-time work or additional borrowing.

Understanding APR is not just about a rate - it is about what you will pay in pounds and pence each month and over the full term.

Who benefits from this guide

If you are considering university in 2025/26, returning to study part-time, or supporting a student as a parent, this guide will help you map the funding mix. It explains the official student finance picture in England, flags the different fee rules across the UK, and outlines private finance options to cover shortfalls for equipment, relocation or professional courses. It is also useful if you already have a Plan 2 loan and are thinking about further study under Plan 5, or if you want to understand the repayment impact when your income crosses £25,000. Kandoo specialises in retail finance broking, so we focus on clarity, affordability and helping you compare options responsibly.

Funding routes you can consider

1. Tuition Fee Loan - covers up to the full fee cap where applicable.

2. Maintenance Loan - living cost support paid termly into your bank.

3. NHS or employer sponsorship - limited but valuable for specific courses.

4. Scholarships and bursaries - university or charity awards that do not need repaying.

5. Part-time work or degree apprenticeships - earn while you learn to reduce borrowing.

6. Private student-focused personal loans - for equipment, travel or shortfalls.

7. 0% purchase credit cards - for staged course materials costs if repaid on time.

8. Family support or LISA withdrawals - structured help or savings used tax-efficiently.

Cost, impact, returns and risks

Who qualifies and how providers assess

Eligibility varies by nation and product, but some rules are consistent. English tuition and maintenance loans generally require UK residency criteria, studying on an eligible course at a recognised provider. Maintenance amounts scale with household income, living location and study intensity. In 2025, the minimum maintenance loan for higher-income households is £3,907, with upper limits up to £13,762 in London and £10,544 outside London when living away from home. Part-time students can access proportional tuition support, with England’s part-time fee cap set at £7,145 and accelerated courses higher.

Repayments for most new English undergraduates fall under Plan 5. You will repay 9% of earnings above £25,000 through PAYE. If your income dips below the threshold, repayments stop automatically. Interest is set using RPI from September 2025, and some plans use the lower of RPI and base rate plus 1% to protect borrowers during rate shifts. Across the UK, thresholds and fee caps differ, so Scottish, Welsh and Northern Irish students should check their national rules.

If you explore private loans for equipment or living costs, lenders will assess credit history, income stability and affordability. As a UK-based retail finance broker, Kandoo can help you compare options, highlight total costs, and avoid borrowing beyond what is sensible for your circumstances.

Step-by-step to secure funding

1. Map course fees, rent and essentials for a full year.

2. Check national rules for your chosen place of study.

3. Apply for tuition and maintenance loans early online.

4. Confirm your household income evidence with Student Finance.

5. Search scholarships and university hardship funds.

6. Plan part-time work around lecture and exam schedules.

7. Compare private loan APRs and total cost before committing.

8. Set up a budget and emergency buffer from day one.

Advantages and trade-offs

Before you commit

A strong plan starts with a realistic budget. Break your year into rent, utilities, food, travel, course materials and contingencies. Factor in that student loan interest is set around inflation for 2025/26, and that repayments only begin when you earn above £25,000 if you are on Plan 5. If you expect to study in London, test your numbers against the higher living cost maximum of £13,762 and check whether your household income reduces what you receive. For England-based part-time study, remember the separate fee cap and proportional support. If you need a private top-up, keep terms short where possible, compare APRs, and ensure repayments fit your projected graduate income. Good finance should reduce stress, not add to it.

Alternatives that might suit

1. Degree apprenticeships - earn a salary while tuition is covered by the employer.

2. University hardship funds - targeted support when circumstances change unexpectedly.

3. Rent guarantor schemes - may unlock better housing without large upfront payments.

4. Equipment grants from charities - laptops and specialist kit with no interest.

5. Family loans with clear agreements - interest-free and structured to avoid conflict.

Your questions answered

Q: How much are tuition fees in England for 2025/26? A: Universities can charge up to £9,535 for full-time undergraduates. Part-time caps are £7,145, with higher limits for accelerated courses.

Q: What maintenance support could I receive? A: In England, maximums are £13,762 if living in London, £10,544 when living away outside London, and £8,877 at home. Actual amounts depend on household income.

Q: When do repayments start on Plan 5? A: You repay 9% of income above £25,000. Deductions are automatic through PAYE and pause if your earnings fall below the threshold.

Q: What interest will I be charged in 2025/26? A: Undergraduate loans accrue interest at around the RPI rate of 3.2% from September 2025, or the lower of RPI and base rate plus 1% in some cases.

Q: How do fees differ across the UK? A: Scotland offers free tuition for eligible Scottish students at Scottish universities. Wales caps at £9,250, and Northern Ireland caps local fees at £4,710 with £9,250 elsewhere in the UK.

Q: Are private loans a good idea for students? A: They can help with specific shortfalls like equipment or relocation. Compare APRs, keep terms manageable, and avoid overlapping debt with high-interest credit.

Ready to move forward

If you need a clear view of costs and borrowing, Kandoo can help you compare personalised options for essential top-ups alongside the official student finance you receive. We focus on transparency, total cost and affordability, so you can fund study with confidence and keep future repayments under control.

Important information

This guide is for general information only and is not financial advice. Student finance rules can change and vary across the UK. Check the latest official guidance and consider independent advice before taking out any credit.