Postgraduate Loans in England 2020
The government is now offering up to £11,222 in Postgraduate Loans to English master's students looking to study at a UK university. But are you eligible for the loan?
Unsurprisingly, the Postgraduate Loan (also known as the Master's 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.
So, if you're considering doing a master's degree now or in the future, or you're already on a postgrad course, read on to find out exactly what funding is on offer, and whether the Postgraduate Loan is right for you.
What's in this guide?
- Eligibility for Postgraduate Student Loans
- The cost of studying a master's degree
- How much is the Postgraduate Loan?
- How is the Postgraduate Loan paid?
- Repaying your Postgraduate Loan
- Can you get a Postgraduate Loan if you already have a Student Loan?
- How to apply for the Postgraduate Student Loan
- Is the Postgraduate Master's Loan worth it?
- Alternatives to the Postgraduate Loan
Eligibility for Postgraduate Student Loans
If you meet the following criteria, you should be eligible for a Postgraduate Loan:
- You're a UK or EU citizen who has been living in the UK for the past three years or more
- You 'normally' live in England, not just for the purpose of studying
- You're under the age of 60
- This your first master's or equivalent degree (excluding postgraduate diplomas or PGCEs)
- You're applying for a full master's course (as opposed to a graduate diploma or equivalent)
- You are applying to study at a UK university (whether in England, Northern Ireland, Scotland, Wales)
- You're up to date with your existing Student Loan repayments.
Remember that you'll get your loan from the Student Finance body in the part of the UK you're from, not the country you're studying in.
Note that there are some exceptions to these rules, so it's always worth getting in touch with Student Finance England to double-check your eligibility. For instance, if you previously received a Master's Loan but dropped out of your course due to illness, you'd still be eligible a second time around.
There are also several additional conditions on which your application will be judged – we've just kept it simple by listing the main criteria. See the full details here.
Applying for the Postgraduate Loan as an EU student
If you're not a UK citizen but you are an EU citizen, the current terms are:
- You must have been living in the UK or EU/EEA for the last three years.
- You need to confirm you'll be living in England on the first day of your course.
Cost of tuition fees for master's degrees
The cost of master's courses in the UK varies depending on the type of course and university. Remember, master's degrees 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 a year to well over £30,000, and it's these huge outliers that mean the average cost (according to UCAS) is about £11,000 a 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 want to have some leftover to live on.
How much money can you get from a Postgraduate Loan?
|Course start date||Maximum loan available|
|On or after 1st August 2020||£11,222|
|1st August 2019 – 31st July 2020||£10,906|
|1st August 2018 – 31st July 2019||£10,609|
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.
Is the Postgraduate Loan enough to cover a master's?
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 degree 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 make money during your studies to fund your postgrad education.
If you do find that the Postgraduate Student Loan isn't enough to cover your master's degree, we go through some of the best alternative ways to fund your studies below.
How is the Postgraduate Master's Loan paid?
The Postgraduate Loan money is paid directly to you and will be deposited 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, your total loan will be evenly split between each year of study.
You're free to spend the Postgraduate Loan however you see fit, but remember that it's meant to act as a Tuition Fee 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 may 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.
And 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.
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 you receive your loan instalments, rather than having to pay upfront.
Will a Postgraduate Loan affect your benefits?
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 (presumably because you're allowed to spend the money as you choose, and it doesn't go directly to universities).
Bear in mind, though, that most full-time students won't be eligible for Universal Credit, but there are some exceptions to this – you can find more info here.
If you do receive any financial support from the government and wish to continue receiving it while 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.
Repaying your Postgraduate Student Loan
Just like the undergraduate repayments, the Postgraduate Loan repayment terms are actually pretty generous. Here are the key things to remember about repaying your Master's Loan:
- You'll only start repaying the Postgraduate Master's Loan in the first April after you graduate, and even then you must be earning more than £21,000 a year. This table will give you a rough guide of how much you'll repay each month.
- The thresholds track monthly or weekly income, not just how much you make in a year. You could earn the monthly equivalent of a £21,000 annual salary (£1,750) one month and have to make a repayment, but earn less the next month and not make a repayment.
- 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 overpaying!).
- 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. This means the current rate is 5.4%, but we explain the deal with interest in more detail in our guide to Student Loan repayments.
- As with the undergraduate Student Loan, the Master's Student 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.
Postgraduate 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.
Will the government change the repayment terms of your Master's Student Loan?
The government can (and will!) change the terms of Student Loans at any point.
This means it's not completely impossible for the repayment percentages to 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.
Can you get a Master's Loan if you already have a Student Loan?
You can still apply for the Postgraduate Master's Loan if you already have an undergraduate Student Loan to pay off – but it's worth knowing that you might have to start making repayments on both at the same time, depending on your salary after uni.
Once you meet the salary thresholds, you'll pay 9% on anything above that to your undergraduate Student Loan, plus 6% towards your Postgraduate Loan. However, as the undergraduate threshold for English students is higher than the postgraduate one (£26,525 as opposed to £21,000), there is a bit of a buffer between the two.
What's more, even if you're repaying your undergraduate Student Loan and Postgraduate Loan at the same time, 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 postgraduate and/or undergraduate 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):
Monthly postgraduate and undergraduate Student Loan repayments
|Annual salary||Undergraduate Loan||Postgraduate Loan||Total|
How to apply for the Master's Student Loan
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 for your Postgraduate Master's Loan 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.
Or, 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 Loan application deadlines
|Course start date||Official first day of academic year||Application deadline|
|1st August – 31st December||1st September||1st June|
|1st January – 31st March||1st January||1st September|
|1st April – 30th June||1st April||1st January|
|1st July – 31st July||1st July||1st April|
Student Finance England are now accepting applications for master's courses that start in Autumn 2020.
The deadline to apply for a Master's Loan is nine months after the first day of the last year of your course. So, if you're doing a one-year course, this will be nine months after your start date.
Best alternatives to the Postgraduate Loan
Perhaps more so than at undergraduate level, there are plenty of schemes out there to fund your master's studies for you. But, bear in mind that the Postgraduate Loan does have a generous repayment system, so we'd still advise you to consider it alongside any other means of funding.
Some funding schemes will help pay your tuition and your living costs, while others may just cover your tuition – and usually the funding doesn't have to be repaid. The money often comes from charitable organisations, or companies who'll offer you a job afterwards.
Here are the best alternative ways to find funding for your master's degree in addition to the Postgraduate Master's Loan:
- Look for bursaries, scholarships or grants on The Scholarship Hub to see if there are any that will fund your postgraduate degree for you.
- A part-time job alongside your studies, if you have time, can help cover your living costs as a postgraduate student.
- You can also make use of an interest-free overdraft up to the maximum amount the bank will offer. Just make sure you know how long it remains interest-free so you can work to pay it off before interest gets added.
- Crowdfunding your degree is also an option if you have great social media skills and an interesting story to tell.
- Apply for hardship funds from your university if you're really struggling to start your course or get by during your degree.
- 0% credit cards can help in short-term periods until your next loan instalment arrives, but only when used very carefully and when you're sure you can pay off anything you owe before interest is added.
- You could also consider postponing your master's degree for a year to work in a full-time job to save up for the course – we understand many will feel reluctant to do this, but if you're really struggling to cover the costs of a degree with the Postgraduate Loan, or you're not eligible to receive it, taking a year out to work could help you raise the funds you need.
You'll also find that some commercial loan companies will target you as a postgraduate student, but we strongly recommend you avoid these where possible and use alternative funding methods instead. This is because they often have high-interest rates and repayment schemes that are not as flexible as the Student Loans from the government.
Bonus tip: Some countries in the EU offer heavily subsidised or even free master's degrees to EU citizens (while we're still in the Brexit transition period, that is).
Fancy doing a PhD after your master's degree? The government also offer over £25,000 for doctoral degrees.