The big changes to student funding – this year and beyond

Stacey-May Fox, Funding Information Services Account Manager at the Student Loans Company (SLC), explains changes to the SLC funding package for the academic year 2023/24 and beyond and how they’ll impact new and continuing students.  

Topics covered: 

• Rates for SFE/SFW students from the academic year 2023/24
• Repayment details for SFE/SFW students from the academic year 2023/24
• Repayment details for Plan 2
• How does repayment change for students on Plan 5?
• Ukraine policy changes 
• Hardship application changes
• Childcare grants – long course loans
• Lifelong Loan Entitlement (LLE)

Rates for SFE and SFW students for the academic year 2023/4

Tuition fees

For Student Finance England (SFE) and Student Finance Wales (SFW), maximum tuition fees will remain the same as they’ve been for the last six years. With that said, tuition fees will still vary depending on the type of course:

• For standard full-time courses: the maximum tuition fee will remain at £9,250 for SFE students and £9,000 for SFW students studying in Wales. 
• For part-time courses: the maximum tuition fee will remain at £6,935 for SFE students and £2,625 for SFW students studying in Wales. 
• For full-time accelerated degree courses: the maximum tuition fee will remain at £11,100. However, for Welsh students taking any accelerated degree course in England, the available fee loan will only be made up to £9,250 and any shortfall must be met by the student. 

These changes apply to courses offered by approved providers (with a fee cap) with an access and participation plan (APP) and a Teaching Excellence Framework (TEF) award.

Maintenance loan breakdown – SFE

Maintenance loans will see a slight increase in an attempt to adjust to rising living costs. As usual, a student’s maintenance loan will be dependent on their household income and the area in which they study. 

Students whose household income is £25,000 or less will be eligible for the following maintenance loans depending on where they study: 

• £8,400 for students living at home
• £9,978 for students living away from home, outside of London
• £13,022 for students living away from home, studying in London

As household income increases, the student’s maintenance loan will decrease. However, the decrease is capped once household income reaches a certain level – for students with a household income at or above this level, they will still be eligible for the minimum maintenance loan:

• For students living at home, this applies when household income reaches £60,000. 
• For students studying elsewhere, the cap starts at £65,000. 
• For students studying in London, the cap starts at £70,040.

Maintenance loan breakdown – SFW

The breakdown is slightly different for SFW students as they are also eligible for the maintenance grant from the Welsh Government. 

While the portion of the maintenance grant that makes up the total funding increases the lower the student’s household income, the grant amount will offset the maintenance loan to arrive at the same total. 

Due to this, SFW students will be given the same overall funding regardless of household income. The only factor that will change the amount they are given is the area in which they study. 

With that in mind, the total amount that could be received by an SFW student, regardless of their household income, will be: 

• £9,950 for students living at home
• £11,720 for students living away from home, outside of London
• £14,635 for students living away from home, studying in London

Repayments for SFE/SFW students for the academic year 2023/24

Student Finance England

The government has announced that it will introduce a new repayment threshold for students who begin their studies from the academic year 2023/4 of £25,000 a year.

This new – lower – repayment threshold will be maintained until April 2027, when the students on the new loan terms have finished their 3-year degrees and become eligible to repay via income-contingent repayments.  

From April 2027, the threshold will increase in line with inflation (RPI). 

This includes students studying a postgraduate certification in education (PGCE) who are starting in the academic year 2023/4.

Student Finance Wales 

On 5th December 2022, the Welsh Government confirmed that the repayment threshold for SFW students will remain at £27,295 until April 2025. 

Therefore, new SFE students will be on Plan 5 for repayments from the new academic year, while new SFW students will remain on Plan 2 via income-contingent repayments.

Repayments for Plan 2

Student Finance England

For students who started their studies before 1st August 2023, the Plan 2 repayment rules will still apply. That means: 

• Students won’t make repayments until their income is over £27,295 a year (gross) or the weekly (£524) or monthly (£2,274) equivalent. 
• If they study full-time, students will be due to start repaying from April after completing or leaving/withdrawing from their course. 
• The student will repay 9% of any income over £27,295 and, if employed, deductions will be made from their pay through the HMRC tax system. 
• If they ever fall below the income threshold, their repayments will stop. 

Crucially, any outstanding balance will be written off 30 years after entering repayment on Plan 2. 

As mentioned, these rules apply to new and continuing students with SFW until April 2025.

How do repayments change on Plan 5?

For new students with SFE who start their studies after 1st August 2023, the new Plan 5 repayment rules will apply:

• Students won’t make repayments until their income is over £25,000 a year (gross) or the weekly (£480) or monthly (£2,083) equivalent. 
• As with Plan 2, if they study full-time, students will be due to start repaying from the April after completing or leaving/withdrawing from their course. 
• These students will also pay 9% of any income earned over £25,000, and if employed, deductions will be made through HMRC. 
• If their income falls below the threshold, their repayments will stop. 
• The first Plan 5 repayments will be made in April 2027. 

A big difference between Plan 2 and Plan 5 is the time after which any outstanding balance will be written off. For Plan 5, any outstanding loan balance will be written off 40 years after entering repayment – an additional 10 years when compared to Plan 2. 

Just as with Plan 2, if the student passes away, the entirety of the outstanding balance is written off.

Changes to interest rates

Plan 2 interest

For Plan 2 loans, interest is calculated according to a tiered system: 

1. The first tier is the amount of interest applied to the loan before the student enters repayment. This rate is the Retail Price Index (RPI) plus an additional 3%. Put simply, RPI is the rate at which prices increase. If RPI is at 2.6%, then the total interest accrued for a student in this tier would be 5.6% (RPI + 3%).
2. The second tier applies when the student has graduated from university but earns an income under the repayment threshold of £27,295. At this stage, the student will only accrue interest equal to the RPI. 
3. The third tier applies when the student has graduated and earns between the repayment threshold and £49,130. For this tier, RPI still applies and 3% interest is also applied. 
4. The fourth tier applies to a graduate earning over £49,130, who will accrue interest at RPI + 3%.

It’s important to consider that RPI is variable and reset annually, so the amount of interest a student accumulates could change year-on-year.

Plan 5 interest

Plan 5 interest will not be tiered and will be set at a rate of RPI plus 0% adjusted annually.

Ukraine policy changes

SFE and SFW

Policy changes were introduced during the 2022/23 academic year to provide student funding and home fee status to those who have been granted leave in the UK under what are known collectively as ‘Ukraine Schemes’:

• The Ukraine Family Scheme 
• The Homes for Ukraine Sponsorship Scheme
• The Ukraine Extension Scheme

More information on these schemes and why they were introduced.

Student Finance England

From the academic year 2023/24, this provision will be extended to eligible family members of Ukraine Schemes or ARAP/ACRS holders. This means these students will be eligible to apply for student funding and will be eligible for home fee status.

Change to ‘residency requirement’ date

There has also been a slight change to the residency requirements date for these students. Now, the date has been amended to the day on which the first term of the first academic year starts. 

As long as the student is in the UK the day before the first day of their first academic term, they will be included in these regulations.

The idea behind this change is that it will enable students in the protection categories – such as DVILR and Bereaved Partners – who arrive in the UK after the first day of the academic year but before the start of their course to qualify for support.

Hardship application process changes

For both SFE and SFW, hardship applications can be considered from students who: 

• Are looking for overpayment, and as a result, their entitlement has been reduced
• Have been suspended and want funding to be extended 
• Have a scheduled payment brought forward 
• Have withdrawn from study, having been awarded grants 

Contact must be initiated by the student by contacting either SFW_Financial_Hardship@slc.co.uk for SFW students or financial_hardship@slc.co.uk for SFE students.

For more information on the process of applying for hardship, the government guidance has now been published.

Or, if you would like to know more about how hardship applications can now be made via email or via the SLC’s customer portal on the SLC website, you can find more detail here.

Childcare grants (CCG) – long course loans

Students eligible for a Childcare Grant (CCG) can sometimes experience difficulty if they’re on a course that’s longer than the average course length or if they require a course extension – especially when it comes to ensuring their CCG can also be extended to account for the extra time. 

To account for this, SFE now has a triage team that can make manual payments to ensure those who have CCG on their account can now apply for extra payments if they are on a longer course or have requested an extension.

Lifelong Loan Entitlement

At the moment, SLC is unable to share information regarding Lifelong Loan Entitlement (LLE), but all information in the public domain can be found here.

SLC are still in the process of collating all queries into one area and developing an FAQ section on LLE. Currently, the first batch of questions and answers is with the Department of Education (DfE) for approval. Once approval has been granted, the SLC will publish the FAQs and continue to update them moving forward.

If you would like to submit your own queries regarding LLE, you can send them to fundinginformationpartners@slc.co.uk or contact your local SLC account manager.

Watch the recording

Watch the recording from our CPD-accredited staff training webinar on the changes to funding with expert speaker Stacey-May Fox from Student Finance England.

More info

Download Stacey’s slides here.

Stacey is based in the South West – you’ll find her contact details and those for the Account Manager in your area here.

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