Student loan repayment rules changed for new students from August 2023

Students who began university in August 2023 or later are repaying their student loans on different terms from those who started before that date, according to The Uni Guide¹. The repayment threshold for the newer cohort is £25,000, compared with £27,295 for those who started earlier¹.

Repayments are set at 9% of everything earned above the threshold¹. Interest is capped at the retail price index (RPI) rate of inflation¹. Previously, interest was charged on a sliding scale with a maximum limited to 3% above RPI¹. Interest is charged on loans from the moment they are taken out, including while studying¹.

The write-off period has also changed. For students who started their course from August 2023, any outstanding loan amounts are written off after 40 years¹. Previously, remaining student debt was written off after 30 years¹.

Source: The Uni Guide¹

Tuition fees for a course starting in the 2025 to 2026 academic year are £9,535 a year in England, Scotland, Wales and Northern Ireland, except for students from Northern Ireland studying in Northern Ireland, where the figure is £4,855, and students from Scotland studying in Scotland, where no fees are payable by the student¹.

To qualify for a student loan, a student must be studying at a recognised or listed college or university on a full-time course, be a UK national or have settled status, and have been living in the UK for at least three years before starting their studies¹. Tuition fee loans are generally paid directly to the university or college¹. Maintenance loans are means tested by household income and paid on a sliding scale¹. Applications must be made at the start of each academic year, as circumstances and entitlements can change¹. In England, students apply to Student Finance England; in Scotland, to the Student Awards Agency¹.

Why it matters for households

The rules apply to the cohort that started university from August 2023 onwards, so two graduates on the same salary can repay different amounts depending on when they began their course. A lower threshold of £25,000 means repayments start at a lower level of earnings than for earlier starters, and the 9% rate applies to everything above it¹. Because the write-off period runs for 40 years rather than 30, a larger share of this cohort may still be repaying in their fifties and sixties, and any balance remaining at that point is cancelled¹. The interest cap at RPI, rather than RPI plus up to 3%, changes how the balance grows over time¹. Those earning below the threshold are not required to make repayments, but interest continues to accrue¹. For families, the means testing of maintenance loans means household income affects how much is borrowed for living costs, and the tuition fee loan is paid to the university rather than to the student¹.

What happens next

The sources do not set out any further scheduled changes to the repayment threshold, interest cap or write-off period. Students apply for funding at the start of each academic year, and entitlements can change¹. The tuition fee figures cited apply to courses starting in the 2025 to 2026 academic year¹.

For how repayments are collected through payroll or tax returns, see student loan repayments through PAYE and Self Assessment. For how tuition fee and maintenance loans work, see Student Finance: Tuition Fee and Maintenance Loans Explained.