For many students, going to university is an exciting journey. But along with excitement comes the question of how to pay for studies and daily expenses. Two main types of student loans help with this – the Tuition Fee Loan and the Maintenance Loan.
Both are provided by government-backed student finance bodies (like Student Finance England in the UK) to make education affordable. However, these loans serve very different purposes. Understanding the difference between maintenance loan and tuition fee loan can help students plan better, avoid confusion, and manage their money wisely.
In this blog, we will explore:
- What each loan is
- How the money is paid
- Who receives it
- How repayments work
- Eligibility rules
- Examples with simple calculations
What is a Tuition Fee Loan?
A Tuition Fee Loan is designed to cover the cost of your university course.
- It pays for your lectures, library access, lab facilities, and other course-related expenses.
- The money does not come to you. It is paid directly to your university or college.
- Students usually don’t need to pay tuition fees upfront, which makes higher education more accessible.
Example Calculation – Tuition Fee Loan
Suppose:
- Your course fees are £9,250 per year (common in the UK).
- You study for 3 years.
Total tuition fees = 9,250 × 3 = £27,750
If you take a tuition fee loan, this full amount is paid by Student Finance directly to your university. You won’t see the money in your account.
What is a Maintenance Loan?
A Maintenance Loan helps students with living expenses while they study.
- It covers rent, food, bills, transport, books, and other personal needs.
- This money is paid directly into the student’s bank account, usually in 3 instalments per academic year.
- The amount you get depends on your household income, where you live, and whether you study in London or outside.
Example Calculation – Maintenance Loan
Let’s assume:
- You live away from home, outside London.
- Household income: £25,000.
In this case, you may get £9,978 per year (2024/25 UK figures).
- Payment = 3 instalments → £3,326 each term.
If your household income is higher, say £60,000, your maintenance loan drops to around £4,651 per year.
This shows how the loan adjusts based on financial background.
Key Difference Between Maintenance Loan and Tuition Fee Loan
| Feature | Tuition Fee Loan | Maintenance Loan |
| Purpose | Pays course/tuition costs | Covers living costs (rent, food, bills, books) |
| Who Gets the Money | University directly | Student (into bank account) |
| Instalments | Paid in instalments to university | Paid termly to student |
| Amount Based On | Course fees set by university | Household income, location, study type |
| Repayment | After graduation & income threshold | Same rules as tuition fee loan |
| Control of Money | You never handle it | You manage and spend it |
Repayment Rules
Both loans – tuition and maintenance – are combined into one repayment after you graduate.
- You only start repaying if you earn above the repayment threshold (for Plan 2 loans, £27,295/year in the UK).
- Repayment is 9% of income over the threshold.
- After a certain number of years (e.g., 30 years for Plan 2), any remaining debt is written off.
Example – Repayment
Suppose:
- Your total loan = Tuition (£27,750) + Maintenance (£27,000) = £54,750.
- You graduate and earn £30,000/year.
Threshold = £27,295.
Excess income = £30,000 − £27,295 = £2,705.
Repayment = 9% of £2,705 = £243.45 per year (~£20 per month).
Notice: Even with a big loan, repayments are based on income, not the loan size.
Eligibility Criteria
Tuition Fee Loan Eligibility
- Must be a student at a recognised UK university/college.
- Course must qualify (full-time/part-time degree).
- Nationality and residency rules apply.
- Usually available for your first degree.
Maintenance Loan Eligibility
- Same as above, plus:
- Amount depends on household income (parents’ or guardians’ earnings if under 25).
- Where you live (with parents, away from home, in London).
- Year of study (final year loans may be lower).
Pros and Cons
Tuition Fee Loan
✅ Covers full course cost
✅ Paid directly to university
❌ Adds to overall student debt
❌ Interest may build up
Maintenance Loan
✅ Helps with day-to-day living
✅ Paid directly to student
❌ Amount may not cover all expenses
❌ Depends on parental income
Tips for Managing Student Loans
- Budget Smartly – Create a monthly plan for your maintenance loan.
- Track Spending – Avoid spending your loan instalment too quickly.
- Use Discounts – Student cards and railcards save money.
- Part-Time Work – A small job can support living costs without heavy borrowing.
- Understand Repayments – Don’t stress about debt; repayments depend on future income.
Final Thoughts
The Tuition Fee Loan and Maintenance Loan together make university education possible for thousands of students every year.
- The Tuition Fee Loan takes care of your education costs.
- The Maintenance Loan supports your day-to-day living.
By understanding how each works, planning budgets, and being mindful of repayments, students can enjoy their university journey without unnecessary financial stress.