Student Loans For Online Degrees - Everything you need to know

If you’re planning on studying an online degree from a UK university or other higher education institution, you may qualify for student loans offered through the UK Government’s Student Loan Company (SLC). Private student loans from banks and similar services may also be available, although SLC loans have some notable benefits when it comes to repaying them.

The overall market for student finance in the UK is fairly complex, so you’ll need to do some detailed research into what support you qualify for based on your unique circumstance. To help, this guide walks through an introduction to the Student Loan Company loan options for students following online courses.

Plus, we’ll also introduce Wise as a smart way to send international payments with low fees from 0.43%¹ and the mid-market exchange rate every time. Handy if you’re an international student in the UK, or if you’re a Brit planning to study abroad.

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What is the difference between the Student Loan Company (SLC) and Student Finance England (SFE)?

The Student Loan Company² is a non-profit making UK government-owned organisation under the Department of Education. It manages end to end processes for loans and grants for students in eligible courses, at colleges and universities in the UK.

Student Finance England (SFE) is the part of the SLC that deals specifically with loans for people in England. There are also parts of the SLC which focus on loans and grants for people in the other countries of the UK - Scotland, Wales and Northern Ireland. This matters because some elements of student finance and university fees are devolved - meaning that the individual countries of the UK have their own rules about how the processes work.

You can find quick links to the pages for each of the individual student finance organisations, for the different countries of the UK on the SLC ‘About’ page, along with a quick introduction if you’re not sure which of the different devolved organisations you need.

Private loans vs student loans from SLC

It’s useful to note here that students in the UK can also apply for loans from banks and other similar services and providers, based on meeting the provider’s eligibility criteria. These private loans are different to loans arranged through SLC.

SLC is a government body which can help students access relatively cheap finance which they repay direct from their earnings - in a private loan you’re making an arrangement with a bank or company rather than a government body. Different terms and conditions apply.

This guide focuses on the student loans available in the UK through SLC. For more on private loans, you’ll want to check your university’s own finance advice or look at individual banks to see what student personal loans you may be able to apply for.

What types of loans are available?

Going to university is expensive - whether you study in person or online - thanks to the costs of daily living, tuition and accommodation. There are handy resources available on the UK Government website to help students calculate the costs they’re likely to incur³, and individual universities will also have lots of resources on their websites, which can offer a deeper insight into the living costs based on the specific location in the UK, if you’re coming here to study from abroad.

One thing that’s important to note is that many of the resources we’ve used for this guide are intended for students in England. As we mentioned earlier, if you’re in, or if you intend to study in Scotland, Wales or Northern Ireland, the rules, options and costs may be a bit different. Generally though, if you click through on the resources provided at the end of this guide, you’ll find quick pointers to the pages you need for each individual country of the UK, to help your research.

The types of loans available break up into tuition loans, maintenance loans, and additional loans for specific situations. We’ll cover the main options - tuition and maintenance loans - next. It may also be helpful to know that extra help could be available from the government if you have dependents (children or adults you support), disabilities or long term health conditions. We won’t go into detail about these loan types here but you can get more information from the UK Government student finance pages⁴.

Tuition loans

The maximum available student loan for tuition is 9,250 GBP. The amount of loan you can get is assessed based on your eligibility. Any loan you’re awarded is paid directly to your university or college, to offset tuition costs.

Maintenance loans

Maintenance loans are intended to help pay for your daily life while you study. The amount you can get is calculated based on your household income and where in the UK you live. The full award may not be enough to cover all your costs, so you’ll need to research carefully and ensure you have the budget to support yourself while completing your course.

Maintenance loans aren’t always available when studying online - so check if your course qualifies.

Where to apply for your student loan

If you’re a UK student (considered a home student, rather than an international student) you’ll usually need to apply online for your student loan, via the SLC⁵. All the paperwork can be completed digitally and you’ll need to allow up to 6 weeks for processing of your application. There’s a handy tool on the SLC website which walks through the application process based on your specific situation.

If you're an EU student applying for both tuition and maintenance support you can apply online in a similar way. However, if you’re from the EU and want to apply for tuition support only, you’ll need to complete a postal application instead.

Which online degrees qualify for a student loan?

The eligibility criteria for SLC student loans in the UK are complex, and depend on where in the UK the institution you’ll study with is based, the level of educational course you’re pursuing, and⁶:

• The status of your university or college
• Whether your specific course is eligible (including whether it’s full or part time)
• If you’ve studied a higher education course before
• Your age
• Your nationality or residency status

There are UK Government tools online to guide you through the process of working out whether your course qualifies for student loans - and your university or college will also be able to help. Some common qualifications or full time students which can usually be used for a SLC loan application include⁷:

• BA, BSc or BEd, or Foundation Degree courses
• Certificates or Diplomas of Higher Education
• A Higher National Certificate (HNC) or Higher National Diploma (HND)
• A Teacher Training course
• An integrated master’s degree

Naturally, not all courses are available for online study, so you’ll need to double check whether your course type and institution will qualify.

UCAS notes that loan eligibility for online courses depends on several criteria - and you may find that you’re eligible for loans for tuition but not maintenance for example⁸. The options available for you vary by country in the UK, so as with all student finance questions, you’ll need to do your own research into whether or not your specific situation allows you to apply for a loan.

What to look for when applying for loans

Before you apply for any loan to support your study, you’ll need to check a few things, including:

• What are the eligibility criteria to apply?
• What are the minimum and maximum amounts you can apply for?
• What interest rates apply?
• When do you need to repay, and how do repayments work?
• What happens if you can not make a repayment?

The set up for loans from the SLC is very different compared to taking a personal loan from a bank. Therefore the things you need to think about will be very different.

In particular, with a personal loan from a bank you’ll need to agree a repayment schedule upfront. This can mean you have to start to repay straight after you graduate, no matter whether or not you get a job right away after finishing your course. Student loans from the SLC are different, in that you’ll only need to repay once you hit a certain minimum earning. More on that, next.

How do student loan repayments work in the UK?

If you take a loan from the SLC in the UK, you’ll need to repay it, plus any interest accrued. You still have to repay the loan even if you quit the course or leave early for any reason.

Loans are issued according to numbered payment plans (in 2023 - 24 the plans offered are usually Plan 2 and Plan 5 for example). The plan you’re on will dictate when you have to repay your loan, by setting a minimum income amount you must be earning before repayments start.

Once you hit this minimum income (whether you’re employed or self employed), you need to start to repay. Employed people have their repayments deducted at source - their employer simply takes the funds from their salary every month. Self employed people will need to report income and repay at the same time as paying taxes. If you stop earning, repayments also stop - and restart when you earn income again.

The plan you’re on also sets the interest amount you agree to, and the percentage of your employment income that’s deducted to go towards payments every month. To give an example, if you’re on Plan 2 or Plan 5, the following rules apply⁹:

• The minimum income before repaying is 25,000 GBP/year for Plan 5 and 27295 GBP/year for Plan 2 (these limits may be reassessed from time to time)
• Once you hit the minimum income level, you’ll pay 9% of your earnings to SLC until your loan (plus interest) is repaid
• The interest rate that applies to your loan is set at 7.1%

As you can see there are quite a few variables in the system so before you apply for a loan it’s crucial to understand the terms that will apply to your specific situation.

How to easily transfer money using Wise for student loan repayments and more

No matter where you get your loan from, you’re going to need to repay it at some point. If you’re from outside the UK, studying online with a UK institution, you may need to make payments for your tuition and day to day living, or for loan repayments in foreign currencies. You need Wise.

Wise lets you send international payments to 160+ countries around the world, which 50% can be instant¹⁰, and which always use the mid-market exchange rate and low, transparent fees. If you’re sending money to the UK to pay for tuition, loans or anything else for that matter, you can arrange your payment in just a few minutes online or in the Wise app, leaving you with more time to get on with your study.

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Loans from the UK SLC are a fantastic resource if you’re eligible for one. However, the organisation is pretty complex, and can feel a bit overwhelming at first. The good news is that there are lots of clear and helpful resources offered by the SLC to help you navigate how the system applies to your unique situation - and your university can also offer lots of support and advice.

Use this guide to start to unpick student loans in the UK, and how they work for online degrees - and use Wise if you need to repay your loan from overseas, for cheap, fast and convenient international transfers from around the globe.

Please see the Terms of Use for your region or visit Wise fees & pricing for the most up-to-date information on pricing and fees.

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Last check date: 15-Jul-2023