Government resists calls to raise student loan income threshold

The Department for Education (DfE) has confirmed it will not be increasing the household income threshold to access the maximum maintenance loan for students in England.

This has come after a recommendation from the House of Lords Social Mobility Policy Committee to raise income thresholds to reflect inflated living costs. The DfE has rejected the recommendation, maintaining the threshold at £25,000 per year.

In the government’s response, published 24 July 2026, the DfE has stated current and incoming provisions will future-proof student living cost funding.

Maintenance loan amounts will increase yearly in line with forecast inflation from the coming 2026/27 academic year onwards. Additionally, a new system of maintenance grants will be introduced from 2028/29, providing £1,000 per year to disadvantaged students.

The response has also highlighted that, from the 2026/27 academic year, all care leavers will be eligible for the maximum maintenance loan regardless of household income. This provision effectively abolishes the income threshold for care leavers.

The response has also cited fiscal sustainability, and the current £9.1 billion annual cost of maintenance loans, to justify the continued freeze on the income threshold.

[The still-frozen maintenance loan threshold is] the single biggest practical impediment to those wishing to pursue a university education

House of Lords Social Mobility Policy Committee

The initial report from the House of Lords described the still-frozen maintenance loan threshold as: “the single biggest practical impediment to those wishing to pursue a university education.”

Aside from the carveout for care leavers, none of the measures laid out in the DfE’s response will directly benefit students with a household income of greater than £25,000 until 2028, when maintenance grants are introduced.

These grants will be extended to students with household incomes as high as £30,000. However, support for such students will taper down to as low as £500 of additional support.

If the threshold remains unchanged by the time this support is introduced, it will mark 20 years of stasis since the £25,000 limit was set in 2008.

Juliette Rowsell of Times Higher Education has described this as part of the financial burden of higher education shifting from the Treasury to parents. She has noted that, had the threshold increased with inflation, it would have risen by over 60% to more than £40,000.

Official guidance from the Student Loans Company states: “Students are expected to make up the difference between the Maintenance Loan amount available to them and their total living costs.”