When applying for university, one of the first thoughts that will cross your mind is how you’re going to fund your studies and living costs as a student.

For most, the financial strain of university is aided by applying for a tuition fee loan and a maintenance loan through student finance. In fact, ‘more than two-thirds of students take out both types of loans to help them pay for their studies’, highlighting just how common these loans are.

Any student loan that you borrow will need to be repaid. That said, you won’t start making repayments until you’ve finished or left your university course and your income reaches the repayment threshold. 

So, what’s the difference between a tuition fee loan and a maintenance loan?

The main difference between the tuition fee loan and the maintenance loan is that they’re different loans designed for different purposes. As the name suggests, the tuition fee loan is to cover the cost of your studies, whilst the maintenance loan is to cover the cost of living expenses, such as rent for student accommodation.

Additionally, a large difference between the tuition fee loan and the maintenance loan is that your tuition fee loan will be paid directly to your university. As such, you’ll never see the money from this loan in your bank account at any point.

The maintenance loan, on the other hand, will be paid directly into the student’s bank account. As such, it’s your responsibility to budget it appropriately to cover the various living expenses.

Lastly, a difference between the two loans is how the tuition fee is paid. The first two instalments will both cover 25% of the total amount borrowed, and the last instalment will cover 50%. Although the maintenance loan is also paid in three instalments, they’re generally more equal in comparison.

Now you’ve got a better understanding of the differences between a tuition fee loan and a maintenance loan, let’s break down these student loans and what they cover further.

Tuition fee loan.

The majority of people, including full and part-time undergraduate and postgraduate students, can apply for a tuition fee loan.

The cost of tuition will also depend on where you’re living, and where you’re attending university. 

For instance, the ‘maximum annual tuition fee in Wales in 2023/24 is £9,000, although you may be charged up to £9,250 if you choose to study elsewhere in the UK’. 

However, whether you’re eligible for a tuition fee loan will also depend on a few factors, including:

1. Your university of choice
2. Your course of choice 
3. Your nationality 
4. Your age
5. Whether you have studied a higher education course in the past 

Maintenance loan.

While this can vary, maintenance loans are typically split into roughly 3 equal instalments throughout the year.

How much money you’ll be eligible to borrow will depend on where you’re living whilst you’re studying as well as your parents’ combined household income. That said, not all students will receive the same maintenance loan amount as others.

It’s also worth mentioning that the maintenance loan you will receive in your final year of study will be lower than in previous years. 

This comes down to the fact that come June and July of your final year, you’ll no longer be a student and won’t be entitled to a student loan. 

Your maintenance loan will help to cover various costs, such as:

1. Student accommodation
2. Travel costs
3. Food
4. Books  

1. Student accommodation. 

One of the largest outgoings as a student is rent for student accommodation, and your maintenance loan will help to cover this.

Generally speaking, the majority of student accommodation allows you to pay your rent in instalments throughout the year to cater for the fact the maintenance loan is paid in instalments.

This helps to spread the cost of accommodation and can also enable you to use your maintenance loan for other living expenses during the term.

2. Travel costs.

Depending on the university you choose, you might be at a campus university or a city-based university.

If you’re living on campus, you’ll likely need to spend less on travel in your first year but this will likely increase once you move away from campus. 

Alternatively, if you’re attending a city-based university, you’ll need money to travel to and from university if it’s further afield.

To save money on travel costs, common purchases include student bus passes and the 16-25 Railcard. 

3. Food.

Aside from rent and travel costs, food is likely to be your biggest outgoing as a student. 

Depending on the amount of maintenance loan you receive, this loan can also help to cover the costs of food.

That said, learning how to budget properly at university is essential to manage your stress as a student and to ensure you’re not at risk of spending your maintenance loan too quickly.

4. Books.

While the number of books you’ll need will depend on the course you decide to study, your maintenance loan can also help to cover the cost of textbooks. 

Although you can save yourself a lot of money by borrowing books from the library, you’ll inevitably be required to pay for some.

While many students rely on the support of both tuition fee loans and maintenance loans, part-time work also provides another means of supporting yourself through university. 

We hope that this article has provided you with a better understanding of the difference between a tuition fee loan and a maintenance loan. 

Written by Jemima for Host.