Tuition fees in England were frozen at £9,250 a year from 2017 until 2025, when they rose to £9,535 – the first increase in eight years. They’re now index-linked to inflation each year rather than frozen, so a three-year course starting this autumn is likely to cost somewhere around £29,000 to £30,000 in fees alone by the time it finishes, before living costs are added on top. For a family weighing up how to support a child through university, that’s worth knowing before working out the rest of the numbers.
How Plan 5 loan repayment actually works
Students starting university now borrow under Plan 5 terms. Repayments begin once income exceeds £25,000 a year, at 9% of everything earned above that threshold, taken automatically through payroll. Interest is charged at RPI only, with no additional percentage on top. Any balance still outstanding after 40 years is written off completely – the longest write-off period of any UK student loan plan, which is a meaningful detail: for a significant proportion of graduates, particularly those in lower-paid careers, the loan functions closer to a graduate tax over their working life than a debt they’ll ever fully clear.
The maintenance loan doesn’t cover the actual cost of living as a student
The average student’s living costs run to £1,142 a month, according to Save the Student’s most recent survey, while the average maintenance loan works out at around £640 a month – a shortfall of roughly £502 every month, echoed by the House of Commons Library’s own figures on the gap between support and real costs. The effect of that gap is significant: 61% of students said they skip meals to save money, 56% said their maintenance loan simply wasn’t enough to live on, and 41% said they’d considered dropping out for money-related reasons. Whatever a family decides to contribute, the maintenance loan shortfall – not the tuition fee, which is loan-funded regardless of income – is usually the part that actually needs planning for.
Weighing up whether to pay it off, or help with living costs instead
Because interest is RPI-only and a large proportion of graduates are expected to have some or all of their balance written off after 40 years, paying off a child’s tuition fee debt directly is rarely the most effective use of family money – for many graduates, particularly those who won’t earn enough to repay the loan in full, the debt naturally reduces in real terms over time rather than growing into a burden. Regular help with living costs during the course itself, when the £502 monthly shortfall is actually being felt, tends to make more practical difference than a lump sum aimed at fees years down the line. We’ve set out the fuller toolkit for structuring that kind of support – gifting allowances, Junior ISAs, and (for Armed Forces families) the Continuity of Education Allowance – in our companion piece on doing this properly.
Let’s work out what fits your family
We work with families across Poole, Bournemouth and the wider Dorset area to work out what supporting a child through university actually costs, and how to structure that support without derailing the rest of your own financial plan. If you’d like to talk through your own numbers, get in touch and we’re happy to have a no-obligation conversation.
This article is for general information only and does not constitute financial advice, which should be based on your individual circumstances. The information is aimed at retail clients only. All information is correct at the time of writing (September 2026) and is subject to change in the future.
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