The UK Budget is the government’s yearly plan for the country’s annual spending and taxes, affecting everything from rail fares to the money that universities receive.
Though students are typically neglected from the statement, the Chancellor of the Exchequer’s 2025 Budget marks an exception, with changes for increased tuition fee caps and maintenance loans, as well as a promise for the return of maintenance grants for those studying priority subjects from deprived backgrounds.
What does this mean for the future of education?
Tuition fees are set to increase, potentially hitting £10,000 by 2027/28. Already high interest rates mean affording university for many just isn’t an option. Staying closer to home to reduce reliance on maintenance loans, which are means-tested, has been one way to reduce costs. But with expensive course fees, a lack of budget support is a further blow to university hopefuls.
There has already been talk of a funding crisis as international student applications declined by 16% in 2024. The government plans to fund maintenance loans and further support higher education, due to the structural shift in international student levy. It has been said that from 2028, providers will pay £925 per international student, with the first 220 students exempt.
This means that universities that recruit less of these students could potentially lose 10–14% of their international income, while for other high recruiting universities the impact may only be marginal. This will affect the amount of domestic teaching and research roles available, changes that the sector is already experiencing with over 10,000 roles disappearing in the UK in the past year.
Maintenance loans, however, are set to increase by 2.7%, meaning that your current loan should stretch further than previous years, in line with current inflation that has outpaced student support in the past.
Alternatively, the Budget also mentioned freezing parental income thresholds, resulting in a significant decrease in students who qualify for maximum financial support. Therefore, despite a slight overall increase, many families who were once provided financial support will have to consider covering larger funding gaps, or face financial hardship.
Rent is the highest cost that students in the UK will face. The Budget outlines a new government commitment designed to stabilise prices and make them more affordable. Energy costs are another concern for students living on campus or away from home. Reeves is not expected to freeze energy prices, however, the government is set to introduce more support for this through rental packages, where bills are included in the rent.
Expected minimum pay raises for lower income workers, including students, further allow for support during studies. For those working 20 hours or less a week, there will be a slight increase to take-home pay, benefiting all who work in hospitality, retail, call centres, and university campus-related jobs.
For support with student finances, visit https://www.ucas.com/money-and-student-life/money/student-finance