Postgraduate Loans for Master’s Degrees 2018/19
The UK government is now offering up to £10,609 in loans to master's students looking to study at a UK university. But are you eligible for the loan?
Unsurprisingly, the postgraduate loan comes with its fair share of small print that can be hard to get your head around at first.
There’s a lot of info to take in, but luckily we've done the hard work for you by simmering it all down to the cold hard facts.
The funding has been available since August 2016, and this year the amount you can borrow has gone up to £10,609 depending on when you started your course.
So, if you're considering doing a master's degree now or in the future, read on to find out exactly what’s on offer, and whether the loan is right for you.
What's on this page?
- Who's eligible for the postgraduate master's loan?
- How much does a master's degree cost?
- How much is the postgraduate master's loan?
- How is the postgraduate master's loan paid?
- How is the postgraduate master's loan repaid?
- What if I've already got a student loan?
- How do I apply for the postgraduate master's loan?
- Is the postgraduate master's loan a good deal?
- Are there alternatives to the postgraduate master's loan?
As with anything that involves the government parting with money, working out if you’re eligible can be pretty complicated! We’ve tried to keep things simple: if you can answer 'yes' to all 6 questions below, you’ll most likely be accepted for the loan.
- Are you a UK citizen who has been living in the UK for the past three years or more (so you haven't been living abroad anywhere during this time)?
- Do you 'normally' live in England?
- Are you under the age of 60?
- Is this your first master's or equivalent degree (not including Postgraduate Diplomas or Certificates of Education)?
- Are you applying for a full Master's course (as opposed a graduate diploma or equivalent)?
- Are you applying to study at a UK university (whether in England, Scotland, Wales or Northern Ireland)?
Or, if you're not a UK citizen but you are an EU citizen, the current terms are:
- You must be living in the EU/EEA for the last three years and be an EU citizen
- You need to confirm you'll be living in England on the first day of your course.
Postgraduate students from Northern Ireland, Scotland and Wales
Whilst this particular postgraduate loan is only available to those UK citizens who 'normally' live in England, the great news is that governments in Wales, Scotland and Northern Ireland all now offer their own postgraduate master's loans too.
The Welsh government will be offering loans of up to £13,000 in 2018/19, but only if your course starts after 1 August 2018 - otherwise, if your course started between 1 August 2017 and 31 July 2018, you can only apply for up to £10,280.
Master's students in Scotland will also be able to borrow up to £10,000 this year, with £5,500 going straight to universities to supplement tuition fees, and a further £4,500 up for grabs to fund living costs.
A smaller loan of £5,500 will be available to students in Northern Ireland to cover the cost of their master's tuition.
The cost of master's courses in the UK vary depending on the type of course and university. Remember, master's can be taught or research-based, and that's before you even consider the different costs associated with different subjects and universities.
Master's degrees can cost as little as £4,900/year to well over £30,000, and it's these huge outliers that mean the average cost (according to UCAS) is about £11,000/year - a tad more than the maximum loan amount.
However, it's worth noting that this financial support isn't just a tuition fee loan - it's a maintenance loan too (to help cover living costs). Don't just look at the amount available and think "oh, it covers my tuition, that's great" - you'll need some left over!
To find out exactly how much your course costs, check out your university's website or a master's course comparison directory.
How much you can apply for depends on when your course started. Crucially, unlike with undergraduate loans, postgraduate student loans are not based on your household income!
It's also worth noting that the maximum loan amount refers to how much you can apply for your entire degree. Although a typical master's course will only last for a year, some (especially part-time options) can last for up to four. If you're studying for more than a year, you'll end up with less money per year than a one-year student.
If your master's course starts on or after 1 August 2018
You're entitled to up to £10,609 for your whole course, and if you're studying for two to four years, the total amount will be divided equally across each year of your course.
If your master's course started in the academic year 2017 to 2018
You can apply for up to £10,280, and again, if you're studying for two to four years, the total amount will be divided equally across each year of your course.
If your master's course started in the academic year 2016 to 2017
You can borrow up to £10,000, but unlike students who started later, the payments won't be spread equally if you're studying for two to four years.
Instead, you'll have received the first half in your first year, and the rest in your second year - so make sure they've paid you everything, as there's nothing left in the pot from here on out!
The loan money is paid directly to you and will be paid into your bank account in three instalments each year (in the form 33%, 33%, and 34%).
As outlined above, if you're studying for two to four years and your course started in the academic year 2017/18 or later, your total loan will be evenly split between each year of study.
If your course started in the academic year 2016/17, you'll have got the first half of your loan in your first year, and the second half in your second year. In other words, if you're studying for three or four years, you'll won't be receiving any more for the rest of your studies!
You're free to spend the loan however you see fit, but remember that it's meant to act as a tuition loan and a maintenance loan.
You might have some spare cash left over after paying your tuition fees, which could then be put towards rent, or course materials that you might need. On the other hand, your course could cost more than your total loan, in which case you'd have to fund the difference yourself.
If you borrow less than the maximum amount, you can increase the loan amount during your course. We would advise borrowing the full amount if you can, as it's unlikely that you'll get a loan with more generous repayment terms from anywhere else in the near future.
If you're worried you'll spend it all too quickly, why not put any leftover cash into a student savings account and watch it grow until you need it?
It's also worth knowing that the money isn’t means-tested - how much you, your partner or your parents earn won’t affect how much you can borrow.
It is possible that the loan could affect any benefits you receive from the government, as the master's loan will be considered a form of income (we guess since you're allowed to spend the money as you choose, and it doesn't go directly to universities).
If you do receive any financial support form the government and wish to continue receiving it whilst you do your master's, it's worth speaking to someone at the DWP (Department for Work and Pensions) about your situation before you apply.
Paying your master's degree tuition fees
If you're worried about your loan instalments coming too late for you to pay your tuition fees - don't!
Have a chat with your university and arrange to pay your tuition fees in line with when your receive your loan instalments, rather than having to pay up front.
Contrary to what Dr Cox is singing, the postgraduate student loan repayment terms are actually pretty generous. Here's a quick rundown of the main talking points:
- You’ll only start repaying the the master's loan once you’ve left your course and are earning more than £21,000 a year. Check out this table for a rough guide to how much you can expect to repay each month
- Loan repayments don't start until April 2019, so even if you graduated in 2017, you won't need to start paying it back until then! The rules change once this date passes, and graduates will start repaying their postgraduate student loan in the April after they graduate
- The thresholds track monthly or weekly income, not just how much you make in a year. You could earn enough to make repayments one month, but not the next
- Repayments are taken automatically from your salary (if you work for yourself it'll happen through self-assessment).
- The first £21,000 of your income is shielded from loan repayments. You then repay 6% on anything you earn above that
- Income doesn’t just mean salary: some bank account interest and benefits could push you over the threshold. Arm yourself with the tax facts to see where you stand (and avoid over-paying!)
- Your loan starts gaining interest from the day you take it out until the day you clear the balance (so you’ll owe more than you actually borrow). Interest is charged at RPI plus 3%, and is updated every September using the RPI rate from March of the same year. We explain the deal with interest in our guide to student loan repayments, so head there to find out more!
- As with the undergraduate student loan, the master's loan is not registered on your credit file meaning it won't affect your credit rating
- The loan is written off after 30 years, regardless of how much or how little you've repaid. Whether you repay the whole lot depends on how much you go on to earn.
Master's loan repayments operate differently to undergraduate student loan repayments, and if you're unsure how yours work, check out our guide to understanding your student loan repayments!
You can still apply for the postgraduate master's loan if you already have an undergraduate loan to pay off - but it's worth knowing that you will have to start making repayments on both at the same time.
Once you meet the salary threshold, you’ll pay 9% on anything above that to your regular student loan, plus 6% towards your master's loan.
However, you need to remember that both will be treated as separate loans and will not be joined together at any point.
Here’s a rough idea of what your monthly repayments may be on the postgrad and/or student loan (note that this table assumes you have a plan 2 undergraduate loan - use our guide to find out which student loan plan you're on):
|Yearly salary||Undergraduate Loan||Postgraduate Loan|
Unfortunately, loan repayments don’t give you any tax breaks. Any income tax you owe is calculated on your salary before any student loan repayments come out - postgraduate or undergraduate.
If you already have an account with Student Finance England (you'll have one if you got your undergraduate loan from them), you can apply online here.
If you don't already have an SFE account, you can set one up now and follow the application instructions on their site to get started.
If you'd rather do it the old-school way, you can download an application form to fill out and send to the SFE by post – download it here.
Postgraduate master's loan application deadlines
Applications for the upcoming academic year will open in the summer (sadly the government aren't being any less vague than that), and the deadlines are pretty flexible too! If you're applying after you've started your course, you'll have nine months to get your application in.
However, it's important to note that the start dates are banded into three-month periods, and a single date is used to apply to all courses that fall within a given time frame. The deadlines for master's loan applications are as follows:
|Course start date||Application deadline|
|1st August to 31st December||Nine months from 1st September (1st June)|
|1st January to 31st March||Nine months from 1st January (1st September)|
|1st April to 30th June||Nine months from 1st April (1st January)|
|1st July to 31st July||Nine months from 1st July (1st April)|
If you don’t happen to have a spare £10k lying about to pay for tuition, the master's loan is a great door-opener as it makes it easier to study without having to slap down tons of money up front.
In fact, when the loan was introduced in 2016, our National Student Money Survey from that year found that 52% of students were more likely to study for a Master's following the introduction of financial support.
The big criticism of the postgraduate loan is that even the maximum amount may not be enough to cover some course fees, let alone living expenses – you might need other income as well as the loan to keep you going.
You’ll also want to give some thought to the repayments scenario: you could find you don’t earn enough to pay the whole loan back (which sounds like a win, right?). However, even temporarily earning enough to make repayments will affect your monthly take-home pay.
As your salary goes up (which is likely over time) and you fancy doing other things with the money – like getting a mortgage, for example – you’ll also be paying more towards your loan. Definitely worth thinking about!
It's also good to keep in mind that the government can (and will!) change the terms of student loans retrospectively at any point (as they did in 2017, though this did at least have some positive outcomes).
This means it's not completely off the cards that the repayment percentages could get a lot worse, or that the repayment threshold could decrease at some point (although given the recent undergraduate loan changes, it's more likely to increase first).
However, despite some horrendous changes certainly being possible, it's ultimately pretty unlikely. If anything does change, it should be minimal!
There are loads of alternatives available for those who are keen to enter postgraduate study.
For example, you could try a Career Development Loan. The terms of this loan aren't as generous as a master's loan (the interest rates are worse, and it doesn't get written off), but crucially, you can apply for both a master's loan and a Career Development Loan.
While this could be useful if your master's loan isn't enough to cover your tuition and your living costs, the terms of the Career Development Loan mean it probably shouldn't be your first port of call.
It has some benefits when compared to commercial loans, but we'd still recommend getting a job or asking family and friends for financial help as options to consider first!
Your other options include a 0% credit card (be careful here!) or try applying to a charity, trust or foundation that offers funding privately (although this can be tough!).
Bonus tip: It’s also worth noting that some countries in the EU offer heavily subsidised or even free Master’s degrees to EU citizens (whilst we're still part of the EU, that is). Check out our top 5 cities in Europe where you can do a Master's for free, and maybe sneak in before Brexit?
Looking for even more info? Check out our Big Fat Guide to Student Finance!