Understanding Parental Contributions to Student Finance in England

Sending a child off to university is a significant milestone, but it also brings financial considerations for parents. In England, the student finance system includes an element of parental contribution, where the amount of financial support a student receives is influenced by their household income. This article aims to provide a comprehensive guide to understanding how parental income affects student finance in England, exploring the expectations, available support, and ways to plan for these costs.

The Cost of University Education

While at university or college, your child or partner will have two main costs - tuition fees and living costs. Tuition fees in the UK amount to £9,250 per year, and some university courses even exceed that. Fortunately, tuition fees are usually covered by the tuition fee loan, which is paid directly to the university.

Saving for university is not just about tuition fees - your child will need enough money to pay for accommodation and other living expenses. The average monthly living costs for a university student in the UK are around £1,104, according to a recent survey. Rent makes up almost half a student’s total spending, with students paying an average of £439 per month. On top of rent, there are costs like household bills (if living off-campus), groceries, transport, leisure activities, and course materials.

To have a minimum acceptable standard of living, it has been suggested that students (outside London) need around £18,632 a year to reach the Minimal Income Standard for Students*.

How Student Finance Works in England

The student finance package in England typically consists of two main types of loans:

Tuition Fee Loan: This covers the full cost of tuition fees, up to £9,250 per year, and is paid directly to the university or college. If you're studying an undergraduate course, you could get a Tuition Fee Loan.
Maintenance Loan: This is designed to help with living costs such as accommodation, food, and travel. The basic rate of Maintenance Loan doesn’t depend on your household income, but they can apply for more that does. The amount a student can borrow depends on their circumstances, including where they study and their household income.

Means-Testing and Parental Contribution

Student loans are means-tested in the UK. The amount of Maintenance Loan a student receives is dependent on their household income. If your child is under 25, for example, they may be considered financially dependent on their parents, in which case they will receive a means-tested maintenance loan based on their parents’ income. The student will then need to provide details of their parents’ earnings for student finance calculations, and the larger the household income, the smaller the loan.

The UK Government expects parents to bridge the gap between the loan given and living costs that go beyond this loan while at university. This means that the higher your household income, the less Maintenance Loan your child will be entitled to, with the expectation that you will contribute the difference.

Household Income Assessment

If your child or partner has applied for student finance that’s based on your household income, you might need to give Student Finance England information about your income. Student Finance England will need information from your spouse even if you don’t live together, or they’re not the student’s parent. You should only give Student Finance England your details - if you live with a partner, they’ll ask for their details separately.

You’ll be asked to give your National Insurance number to support an application, so Student Finance England can get your income details from HM Revenue and Customs (HMRC).

Student Finance England will use your household income for the tax year:

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2024-25 if you’re supporting a student’s 2026 to 2027 application
2023-24 if you’re supporting a student’s 2025 to 2026 application

You’ll need to let Student Finance England know if you have:

paid into private pensions
made additional voluntary contributions
children (other than the student) who depend on you financially

If you don't have a National Insurance number, then you’ll need to complete a paper form and provide supporting documents to show how much you’ve earned.

Your information will be used to work out if your child or partner can get extra Maintenance Loan on top of the basic Maintenance Loan.

If your income in the current tax year is likely to be at least 15% lower than the previous tax year, Student Finance England can assess your household income on what you estimate your income will be. You can submit an estimate of your financial details for the current tax year, if you think your household income will be at least 15% lower than the previous tax year. Read Student Finance England's guide to find out how to do this, and to download a Current Year Income (CYI) application form.

Who is included in household income?

If you’re supporting your child’s application, your household income is the combined income of you and:

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your child
your spouse
your partner

If you live with your partner, they’ll need to give Student Finance England their information even if you weren't living together during the tax year being asked about.

If you’re separated or divorced, your child should tell Student Finance England who they live with or have most contact with. If they spend an equal amount of time with both of their parents, they’ll be asked to pick who will support their application.

Remember, household income is based on your circumstances at the start of the academic year. This means that if you get married or start living with your partner before the start of the academic year, Student Finance England will need their details.

Household income doesn’t include any income the student might have from working themselves.

If your spouse or partner is applying for student finance, the household income is made up of your income only. Household income doesn’t include any income the student might have from working themselves.

If the student you’re supporting is applying as a care leaver, Student Finance England won't use any household income to work out how much Maintenance Loan they can get.

You must use your own account - you can’t use the same account as your child or partner.

If you've given Student Finance England your details close to your child or partner's course starting, take a look at the process on what happens next.

Estimating Parental Contribution

There’s no set amount of money you should save for your child’s university education. Some experts suggest taking the maintenance loan as a benchmark for estimating your savings goal. The reason for this is your child’s maintenance loan may be reduced due to your income, so parents are typically expected to bridge the gap.

For students in England, you can use the Student Finance calculator to work out the amount of money your child may be entitled to, and how much you might need to top up to meet their living expenses.

To give an idea of what you might be expected to contribute, the maximum student loan amount for students in England living away from home and outside London (and who aren't eligible for benefits) will be £10,554 in the 2025/26 academic year.

The following table provides estimates of parental contributions based on household income, assuming the student is living outside of London and away from home:

Household income	Maintenance Loan	Parental contributions
£25,000 or less	£10,544	£0
£30,000	£9,791	£763
£35,000	£9,038	£1,506
£40,000	£8,285	£2,259
£45,000	£7,532	£3,012
£50,000	£6,779	£3,765
£55,000	£6,026	£4,518
£60,000	£5,273	£5,271
£62,377 or more	£4,915	£5,629

These figures are estimates, and the actual amount you may need to contribute will depend on your child's individual circumstances and spending habits.

Additional Financial Support

Depending on what and where you choose to study, you may be eligible for additional sources of funding. It's important to understand how you'll repay any money you borrow.

There is extra support available for students who have a disability, including a long-term health condition, mental health condition, or specific learning difficulty, or students who have children or an adult dependant who depends on them financially.

Maintenance Grant

Maintenance grant (which you don’t need to pay back) is available to some students depending on their household income.

Disabled Students’ Allowance (DSA)

You may be eligible for the Disabled Students’ Allowance if you have certain disabilities or learning difficulties. This is available for full and part time students, and for undergraduates and postgraduates. Within the overall allowance there are 3 different allowances for different purposes; Consumable Items Allowance; Equipment, Software, & Accessories Allowance; and Non-Medical Personal Help allowance. Your eligibility for each of these depends on your circumstances and your course. You can apply for the Disabled Students’ Allowance from SFE if you have particular disabilities or learning difficulties. The allowance is open to full and part time students, and both undergraduates and postgraduates. You do not need to pay the allowance back.

Bursaries and Scholarships

Many universities in the UK offer financial schemes to assist with tuition fee costs and living costs. Similar schemes are available to students with dependents in Scotland. Students across the UK may also be able to access a hardship fund if they are experiencing financial difficulties.

Some universities can provide additional funding to support your child. These aren’t typically loans and will be given at the beginning of the academic year to help pay for housing costs, equipment or everyday living costs.

Scholarships are sometimes awarded to those who have excelled in academics, sports or music. They usually help with living costs and tuition fees by providing discounts on university accommodation and teaching. Scholarships are also specific to each university.

Saving for University

Saving for your child’s university education can seem daunting given the soaring cost of living in the UK, but it doesn’t have to be difficult. Starting to save for university early, perhaps with a children’s savings account or junior ISA when your child is born, means there is plenty of time for the money to grow and accumulate interest. And even if they choose not to go to university, you’ll have built up a substantial pot of money that will give them a leg up as they start making their own way in life.

To get started with saving for your child’s university education, you might consider your child’s age and how soon you’ll need the funds. Are they just entering their teenage years, or are you keen to begin saving from their birth? If your child is approaching university age, a high-interest savings account may be the most suitable option. This way, the funds are readily available, and you won’t face any risks that come with investments.

Savings Options

High-Interest Savings Accounts: These accounts offer easy access to your funds while providing a competitive interest rate.
Fixed Rate Bonds: These accounts typically offer higher interest rates than standard savings accounts. Once you deposit your initial amount, you won’t have access to it until the end of the fixed term, which is typically between six months and five years.
Junior ISAs: These are tax-efficient savings accounts for children, where the interest earned is tax-free.

If you want to put money aside for your child’s education, one option worth considering is a fixed rate bond. Opening a fixed rate bond for your child’s education lets you accurately estimate the value of your funds when it’s time to pay for their studies. Plus, knowing that this money is locked away for a specific purpose helps avoid the temptation of dipping into your savings.

Budgeting and Financial Planning

Because living costs vary so much from student to student and also based on location, encouraging your child to budget can also be beneficial. Budgeting techniques like the 50/30/20 rule can provide a structured way to manage their finances effectively. Having a specific goal in mind can also boost motivation as you work towards building up their university savings.

Budgeting Tips for Students

Look for accommodation a little further out from the main city centre, it’ll likely be a little bit cheaper the further away they are from campus.
Be savvy with food shopping, set a budget and stick to it. Budget supermarkets are perfect for students (keep an eye out for middle aisle bargains!) and even the bigger ones have some great offers on easy-cook foods.
Book transport as early as possible to avoid paying more and be aware of when peak and off-peak times are. Planning train or bus journeys in advance can go a long way in saving money over the year.
Buy second-hand - this goes for everything from textbooks to clothes. Be smart and look online for textbooks that past students are trying to get rid of. Just make sure they’re the same edition your child needs.
Use student discounts where possible. These can range from 5 to 20% off. From healthcare, clothing, shoes and even homeware, using a uni discount card can really make their money go that little bit further.

Addressing Misconceptions and Seeking Clarity

MoneySavingExpert said loan letters to students did not mention that they could be receiving less than half the maximum loan for living costs due to a means test of household income.

Many parents were unaware that the system implied they should make up the shortfall, MoneySavingExpert said. This could leave parents unprepared and unable to find the cash to help. Or parents who have the money could refuse to give students any more, not realising the loan size has been reduced.

Donelan wrote to Lewis and committed her officials to working with the Student Loans Company (SLC) to ensure that future communications with students explain the difference between someone’s maintenance loan and the maximum possible award. She added: “We will ask the SLC to make clear that this additional funding might be from several sources, which may include from a student’s parents or household members where applicable … ”

Lewis said: “Politicians argue day and night about tuition fees, but the biggest practical problem faced by students is that many don’t have enough to live off. A huge part of that is because the system does not give families the benefit of foresight when it comes to living loans. Loans are reduced because of household income, therefore parents are expected to plug the gap - it’s as simple as that."

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