Your guide to university fees, loans and grants

tuition fees

tuition feesConfused about the increase in university fees? You’re not alone; a recent survey from YouGov finds 33% of parents with kids aged 13-21 have little or no understanding of the new university tuition fees system in England and Wales.

It can be a scary prospect for any parent with a child looking at entering student life in the next few years, that’s why we’ve put together all the important bits to put you on track.


Key information:

  • Tuition fees – the fee universities set for students to pay to study. The amount is set by the university.
  • Tuition fee loans – most students do not need to pay any tuition fees up-front; these are covered by the tuition fee loan that will be paid direct to the university to cover their tuition fees annually.
  • Maintenance loans will cover the costs of living expenses and will need to be paid back in full, with interest.
  • Maintenance grants are available for lower income families earning up to £42,875 and will not have to be paid back.
  • Loans and grants can be applied for by visiting the DirectGov website from the beginning of the year they wish to study.
  • For full time students, the earliest they will need to start repaying is in the April after graduation and only if they earn over a set amount.
  • After thirty years, any remaining debt is wiped.
  • It won’t go on their credit files.
  • Your child could qualify for a scholarship, bursary or award and these will not need to be paid back.


The costs:

The average tuition fees from 1 September 2012 for a student studying in England will be between £6,000 and £9,000 a year depending on the university. The other major cost to consider is living expenses including things like rent, books, food and drink, bills and travel.

Accommodation costs can be one of the biggest outlays but can be covered with the help of a maintenance loan. The amount your son or daughter is entitled to will depend on household income and where they are living whilst studying.


What help is available?


Financial help available Max amount available

First year maintenance loan outside London away from home

£5,500 a year

First year maintenance loan within London away from home


£7,675 a year

First year maintenance loan if you live at home

£4,375 a year

First year maintenance grant given to families with incomes under £25,000 a year

£3,250 a year


It is also worth checking out if your child is eligible for scholarships and bursaries, extra financial help if they have a disability, or any dependants, and the National scholarships programme.

The money owed from the maintenance and tuition fee loans will be put together into one total repayment plus interest. Instead of being bogged down by this large total figure, it’s better to look at it from a different perspective: more like a sort of graduate tax that is paid back proportional to income, rather than a scary lump sum.


Simple guide to repayments:

Salary per year Equivalent to monthly repayment of
















Remember if your kids are from or going to Welsh, Scottish and Northern Irish universities there may be different fees. For example there are no tuition fees if you are Scottish and going to a University in Scotland.


Top tips:

Teach your kids money management – by teaching your kids the basics early it will help them budget for independent living in the future.

Compare student bank accounts – many student bank accounts offer an interest free overdraft which can be anywhere up to £3000 in the first year.

Be a savvy shopper for university essentials – if your kids are moving away from home for university they will be looking for proper kit for independent student living – and we’re not just talking about a beer fridge! You’ll find some savvy shopping tips in our shopping zone, and can make some great savings with the voucher zone.

Take a look at your finances – Thousands of parents have run up debts paying for their children to go to university and four in ten have borrowed money or used overdrafts/credit cards to fund their children’s degree, says a recent poll from Cross Country trains. By cutting your own costs, and working out a proper budgeting plan now, this may allow you to save more for your child’s university fund. Take a look at our 30 minute budget makeover to get you started.